The need for redundancy often comes about through no fault of the employees involved.
Litigation and tribunals can be avoided by offering the affected staff severance packages that reflect this fact. It can improve goodwill and give them a chance to find their feet and continue paying their bills while they seek alternative employment.
Non-compulsory (or voluntary) redundancy can be an effective way of giving those who don’t feel committed to the company a chance to leave on good terms, or for those approaching retirement to start early.
This approach is often key to an effective selection process and presents another means of improving goodwill and reducing the chances of ill-feeling between employer and employee. Non-compulsory redundancy is usually offered during the early stages of a round of redundancies, albeit with the option of elevating to compulsory redundancy should too few employees apply.
Many employees will be relatively happy to move on with such a package and retain the opportunity to have the ex-employer as a valuable reference.
It is an unfortunate fact that from time to time, most medium to large companies will have to make some redundancies.
Sometimes redundancies could be due to the simple mathematics of the order book not being as full as the company would like. Other times, it is down to the job roles themselves becoming obsolete due to changes in technology or customers’ tastes.
Redundancies also occur when companies merge, become acquired or outsource certain elements of their production or administration practices. As labour is usually among employers’ highest expenditures, it can make considerable savings as long as necessary work can still be carried out.
Many businesses try to make compulsory redundancy the last resort after looking at restructuring, staffing-hours, remuneration or seeking candidates for voluntary redundancy. But when the survival and prosperity of the company are at stake, some employees might simply have to be made redundant.
As far as the company is concerned, compulsory redundancy presents a number of legal responsibilities that must be adhered to, but which many companies are unaware of.
Is redundancy your last resort?
Making staff redundant can be as stressful to company owners and managers as it is to the staff members themselves. And that’s before tribunals, litigation and severance payments potentially consume enormous amounts of time and money.
No matter how watertight your redundancy procedure is, it is usually best to avoid it in the first place. While some positions run their course and become surplus to requirements through technological change, restructuring and relocation, some redundancies are the result of over-optimistic recruitment, role duplication and lack of attention to marketplace trends.
What are the alternatives?
There can be alternatives to redundancy. It might be possible to engage staff in a programme of reducing hours, job sharing, moves to part-time work or renegotiation of contracts and remuneration. Employees might be amenable to such changes when the alternative is compulsory redundancy.
Before you decide to set the wheels in motion on a fair redundancy process, it is vital to consider every possible alternative to redundancy beforehand, such as layoff, pay reductions or transferring employees to alternative roles.
Without consideration of alternatives, it is likely that the redundancy procedure could be deemed unfair.
Shortage of work clause
For certain businesses, there are times when, due to a shortage of work, the employer may need to introduce lay-offs or short-time working.
These can be more attractive options than carrying out redundancies where the shortage of work is only temporary. However the employer must first check that they have a clause in the contract of employment which allows them to impose lay-offs or short-time working otherwise they do not have recourse to such an option.