The processes and procedures surrounding redundancy are certainly one of the more complex topics in employment law. However in the current economic climate, redundancy is an area of employment that is being looked at by more and more organisations in an effort to reduce spending and re-structure.
Redundancy can definitely be a grey area. However legally, an organisation is able to pursue this option and dismiss employees under the terms of redundancy if they have a justifiable motive. One of the main reasons for redundancies is if the employer is looking to cut costs for the organisation.
A further reason is if the post previously held by the employee is being dis-established. However under these circumstances organisations are advised to look at redeployment as an option rather than redundancy. In addition to this, if an organisation is closing down or introducing new systems and technology that render a job unnecessary, redundancy can certainly be an option.
Within employment law there are certain procedures that an organisations must follow when exploring the option of redundancy. If an organisation is making 20 or more redundancies within a 90 day period it is called a collective redundancy.
In these circumstances, employers a legally required to consult with the employees trade union representative or a representative chosen by the employee. Failure to follow this consultation process can result in expensive tribunal claims.
However, if an employer is making less than 20 redundancies they are not obligated to follow a consultation processes (however it may be considered good practice to do so). Under these circumstances employment law states that employers should ensure they select their employees fairly and consistently, inform the employees in advance and communicate with them throughout the process, and pay them a fee for being made redundant. It is also prudent for organisations to seek specialist employment law advice when considering making redundancies.