It is true of most businesses that the people who they employ
are at once their single biggest asset and single biggest
Whilst employers usually derive satisfaction from the fact of
providing their employees with an income, a good place to work and
job security it is a sad fact that, especially in economically
challenged times when order books are not as full as they were last
year, or the year before that, the responsible business owner must
constantly review its workforce to ensure that it is operating to
Redundancy occurs most usually when the employer is overstaffed
and no longer has the same requirement for the number of workers
that the business employs. This overstaffing may be due to a
reduction in the volume of work required to be done within the
business because demand for its products or services has decreased
but it is often linked to other issues such as technological change
and geographical relocation.
Put simply, the key to a successful redundancy process is that
it is conducted fairly. Fairness will ensure that the business will
be able to successfully defend itself against any claims of unfair
dismissal and, perhaps just as importantly, that those employees
who remain with the business after completion of the process can
feel that their employer has acted reasonably and justifiably to
preserve their jobs and the future of the business. It is not
unusual for businesses to enjoy a boost, a surge in performance
after a redundancy process but that, perhaps unexpected, side
effect will only be enjoyed if employees are satisfied that the
employer has acted fairly.
To ensure that the process cannot be criticised the employer
will need to plan any redundancy carefully and devise a process
that is fair. Usually this will mean taking the following steps:
The employer must identify an appropriate pool for selection.
So if, for example, a business needs fewer van drivers it must pool
all van drivers together. Employees may want to argue for as a wide
a pool as possible (to reduce the individual risk of being made
redundant) and, given that most of the employees would probably
drive a van the employer must choose carefully before deciding
which employees should be at risk and which should not.
Once a pool has been identified that employer must consult,
properly and with an open mind, with members of the pool to
establish whether or not there are any alternatives to
The employer must devise a method of selection. Most commonly
employers use a scorecard method to determine the strongest
employees by reference to a range of criteria (such as length of
service, performance, attendance etc). The criteria must be
objective and any criteria which allows a manager to exercise too
much of his or her opinion in relation to a specific issue like,
for example, the employee's "attitude" should be
It is perfectly possible in all situations to devise a fair
process and employers should take the time do to so. As stated, the
benefit of doing so might be a workforce operating with renewed
confidence and optimism and the avoidance of an unfair dismissal
claim the maximum cost of which could be over Ł70,000 in
compensation to the employee.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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