Redundancy
In general an employer is entitled to decide the structure of their business, including the roles within that structure, however, they also have duties to their employees. In the case of a restructuring that may lead to a redundancy, it must be genuine, fair and reasonable. The employer must act in good faith, consult with employees who may be affected, usually provide the employees with access to information driving the process, provide the employees with the opportunity to comment on the proposals and consider those comments prior to making a decision.
The announcement of a possible redundancy will be stressful for everyone involved. If several employees are likely to be affected it seems to work well if they are given prior warning of a meeting to discuss the proposal and then at the meeting they can be given additional information and the chance to ask questions. If one to one meetings are held, the employer would be safest to approach this as they would a performance process by giving written prior warning of the meeting, and what it will deal with, and by allowing the employee to bring someone with them.
If a redundancy is mishandled the employer can face a personal grievance claim. There are two main areas where employers get it wrong: procedural and substantive errors. An example of how procedural issues can arise is where an employer, out of the blue, announces that employees are redundant - with no prior discussion or consultation.
An example of how substantive issues can arise is where the redundancy is not genuine. We have seen this occur where an employer wants to get rid of a non performing employee and they decide that an "easy" way to do this is to pretend that the employee's position is redundant. Another example, is where the employer selects employees for the redundancy on illegal or unfair grounds, for example, because they don't like the employee's ethnic group. In one case an employee who had recently suffered a major personal tragedy was selected for redundancy because they didn't look happy. If the employer doesn't provide information to the employees or doesn't take their opinions into account this can also create legal consequences for the employer.
Sometimes a redundancy can look like it is not genuine, even though it is. An employee who has recently faced a performance management process is likely to be suspicious if they are suddenly faced with redundancy, even though this may be a coincidence.
Before they start this process, employers need to make sure that the underlying reasons are genuine and justifiable. They then need to fully involve the employees who are likely to be affected. For those employees who are selected for redundancy, offering EAP, paid time off for interviews, and other assistance, can help to put things right.
If the employer has other issues with employees, redundancy is not the way to deal with them. Even if the redundancy is genuine, those other issues risk creating the wrong impression. Given that the average cost to a small employer of a personal grievance claim is around $35,000, using a redundancy process when performance management is more appropriate, or in any way getting it wrong, is likely to prove costly.
The announcement of a possible redundancy will be stressful for everyone involved. If several employees are likely to be affected it seems to work well if they are given prior warning of a meeting to discuss the proposal and then at the meeting they can be given additional information and the chance to ask questions. If one to one meetings are held, the employer would be safest to approach this as they would a performance process by giving written prior warning of the meeting, and what it will deal with, and by allowing the employee to bring someone with them.
If a redundancy is mishandled the employer can face a personal grievance claim. There are two main areas where employers get it wrong: procedural and substantive errors. An example of how procedural issues can arise is where an employer, out of the blue, announces that employees are redundant - with no prior discussion or consultation.
An example of how substantive issues can arise is where the redundancy is not genuine. We have seen this occur where an employer wants to get rid of a non performing employee and they decide that an "easy" way to do this is to pretend that the employee's position is redundant. Another example, is where the employer selects employees for the redundancy on illegal or unfair grounds, for example, because they don't like the employee's ethnic group. In one case an employee who had recently suffered a major personal tragedy was selected for redundancy because they didn't look happy. If the employer doesn't provide information to the employees or doesn't take their opinions into account this can also create legal consequences for the employer.
Sometimes a redundancy can look like it is not genuine, even though it is. An employee who has recently faced a performance management process is likely to be suspicious if they are suddenly faced with redundancy, even though this may be a coincidence.
Before they start this process, employers need to make sure that the underlying reasons are genuine and justifiable. They then need to fully involve the employees who are likely to be affected. For those employees who are selected for redundancy, offering EAP, paid time off for interviews, and other assistance, can help to put things right.
If the employer has other issues with employees, redundancy is not the way to deal with them. Even if the redundancy is genuine, those other issues risk creating the wrong impression. Given that the average cost to a small employer of a personal grievance claim is around $35,000, using a redundancy process when performance management is more appropriate, or in any way getting it wrong, is likely to prove costly.