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Redundancy - A Guide For Employers

By Donna Gibb of Empire HR

October 23 2008 - As the economy continues to spiral out of control and threats mount over a recession, many local businesses are looking at cutbacks in a bid to cope under financial pressure.

And with businesses battling with the balance sheet often the axe falls on staff numbers and the North-east has already endured its fair share of redundancies.

But this is also a difficult time for employers as they face the prospect of losing key members of the workforce who have helped to build the business over a number of years.

If alternative measures to redundancy have been reviewed and cost savings need to be found, employers may have no alternative but to start consulting on possible redundancies.

How to select positions for redundancy?

Where there is a group of employees who all have similar jobs, objective criteria needs to be identified to fairly select those at risk of redundancy. The exception, of course, would be the closure of a specific department or site where all jobs are to go or where a unique position is affected.

Where there are no objective measures in place, many employers are left struggling to select an employee fairly from a pool of similar positions.

With the introduction of age discrimination legislation there is still some debate on "last in first out" as a selection criteria.

The recent High Court case involving Rolls Royce, ruled the use of "last in first out" as part of a long-standing redundancy selection agreement with Unite was lawful as it was a contractual benefit that was effectively a reward for loyalty to the company.

The High Court ruled that this criteria protected older workers who may struggle to find new positions following redundancy.

Before making any final decision on selection criteria and eventual redundancies, an employer should consult with employees to avoid or reduce the need for redundancies.

Another main concern for employers is how the consultation process works.

If 20 to 99 employees face redundancy, at one establishment over a period of 90 days or less, employers have to consult collectively for a period of at least 30 days and where an employer is proposing 100 or more redundancies, they will have to consult collectively for a period of at least 90 days before the first dismissal takes place.

Regardless of the number of redundancies, the employer must hold individual meetings with employees who are at risk of losing their job to discuss alternative vacancies as well as considering measures to mitigate the need for a redundancy situation.

In considering redundancies, it is imperative that employers consult at an early stage before final decisions have been made. This may help ensure they can cut costs now to protect employee positions and the business for the future.

This advice is for general guidance only and any employer should seek legal advice on their specific situation in order to avoid any claims for unfair dismissal from employees.

For further advice and guidance contact the Empire HR team on (01224) 701383 or


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