What is Redundancy?
Redundancy means the employer’s need for employees performing a particular kind of work ceases or diminishes. This can be across the business generally or at a particular workplace, office or factory.
Many people assume a business must have lost business or customers or be losing money for there to be a redundancy in law; this is not the case. Similarly there does not have to be reduced activity.
For example, introducing new technology in a growing and highly profitable business can still amount to a redundancy situation, if there is a reduced need for employees performing a particular kind of work.
What is a fair redundancy procedure?
For individual redundancy situations (i.e. where fewer than 20 redundancies are envisaged by the employer) the following are important ingredients of a fair redundancy procedure:
- Meaningful consultation – if the decision is predetermined it is unlikely to be unfair
- Selecting the at risk pool – which employees should be put at risk (see below)
- Fair selection – where a pool of more than one is identified the employer must select fairly to decide who is made redundant and who is not (from within the pool)
- Suitable alternative roles – a failure to offer such a role may make the dismissal unfair.
Redundancies that are automatically unfair
It is possible for there to be a genuine redundancy situation but for the employer to have selected a particular employee for an automatically unfair dismissal.
For example, if an employer had two employees doing exactly the same job but it lost customers meaning it only needed one employee to do this work, there would be a genuine redundancy situation. But if the employer selected employee ‘A’ as redundant because he had recently made a whistleblowing disclosure the dismissal would nevertheless be automatically unfair.