18. Redundancy

There is a common misconception among employer’s that they are able to make a position redundant rather than dismiss an employee. This is not the case. The investigations by officials into allegations of unjustified redundancy are intense, prolonged, expensive and thorough. The penalties are severe. Employer’s are strongly advised to avoid any such action.

In the case of redundancy the employer should note that it is the position which is made redundant, not the employee. All actions should be taken in full consultation with the employee.

The employee should be:

  • informed of the possibility well in advance (hold a meeting, record it, inform the employee of their right to representation, allow time to arrange representation, give it to the employee in writing);
  • offered alternative employment where possible;
  • advised of the selection process which must be fair and objective;
  • allowed to suggest alternatives to the redundancy;
  • kept informed of the situation (hold another meeting, record it);
  • given assistance with finding alternative work; such as having a CV typed and being provided with as good a reference as possible;
  • allowed time off to attend job interviews; and
  • given consideration for stress factors and offered counselling where possible.

Before a decision is made to make a position redundant the employer must consult with any affected employees. Consultation should not be a mere formality but should provide the employee with a real opportunity to be involved in the decision making process, although consultation is less than negotiation and it is not necessary to obtain the agreement of the person concerned. Consultation should, however provide the employee with precise information about the employer's proposal and a reasonable opportunity to consider the matter.

Gather information in support of the proposal to make the position redundant. Consider alternatives, which could be discussed with the employee. Find out if other employee’s have been made redundant and how those situations were handled and how much, if any compensation was paid.

The Court of Appeal has confirmed that there is no statutory obligation to pay any redundancy where the employment contract is silent on this point. However, employer’s must note that should a court find the procedure followed to be 'unfair', substantial compensation may be awarded.

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