We would always advise our clients that redundancies should be a last resort and explain to them the importance of considering all possible alternatives to redundancy that might better suit the needs of their business.
The following alternatives are what any business should consider prior to making the decision to make an employee redundant.
Short Time Working
Short-time working is defined under the Redundancy Payments Acts as:
• “where an employee’s working week decreases to less than half of his or her normal weekly hours,
• the employee’s pay is less than half of his or her normal take-home pay;
• the situation is not considered to be permanent; and
• advance notice is given”.
Temporary Lay Off
Lay-off, as set out in s. 11 of the Redundancy Payments Act. 1967, has three elements:
1. The cessation of employment because the employer is unable to provide work the employee was recruited to do;
2. The employer (reasonably) believes that the cessation will not be permanent; and
3. The employer gives notice to that effect, to the employee, prior to the cessation.
Lay-off can be a period where no work is performed or the employees may for example work one week on, one week off.
A lay off does not involve a termination of the contract of employment.
Selection of employees for short-time or temporary lay-off :
• Your employee’s contracts of employment should contain a clause informing them that if the need arises, the company may place them on temporary lay-off or short time.
• You must use the same standard of selection criteria as for redundancy.
• The selection must be reasonable and applied in a fair manner.
• Under employment equality legislation, the selection must not discriminate against employees on any of the nine grounds.
Redundancy During the Emergency Period
Section 12 of the Redundancy Payments Act shall not have an effect during the emergency period in respect of an employee who has been laid-off or kept on short-time due to the effects of measures required to be taken by his or her employer in order to comply with, or as a consequence of, Government policy to prevent, limit, minimise or slow the spread of infection of Covid-19.
‘Emergency period’ means the period beginning on 13th March 2020 and ending on 30th November 2020.
Flexible working
Introducing part-time working or job-sharing may be a feasible way of reducing costs for the business. Some employees may welcome this arrangement as it may provide them with a better work-life balance. Prior to this decision being taken you should seek an employee’s consent and then confirm the new working arrangement with them in writing.
Salary Reductions
Consider reducing the wage bill in different ways i.e. overtime ban, salary reduction, or benefits reduction. This would necessitate obtaining the consent of employees.
You would need to meet with your employees and explain to them the situation the business is currently facing and that the overtime ban, salary reduction or benefits reduction is being considered in order to avoid any potential redundancy situation(s).
Reducing the use of agency staff/consultants
If applicable, consider reducing the use of agency staff and self-employed consultants in order to reduce your business costs. You would need to ensure that the employment status of such individuals (agency staff and self-employed consultants) does not legally qualify them as “employees”. If they did then they could claim a right to a statutory redundancy payment and/or take a claim for unfair dismissal.
You should also be careful if considering terminating part-time or fixed-term employees, as these employees are protected against less favourable treatment in comparison to full-time employees unless it can be objectively justified by you the employer.
Redeployment
An effective way of retaining key skills and avoiding redundancies is to redeploy affected employees elsewhere within the business wherever possible. Once again, this will need to be done with the employee’s consent.
Recruitment freezes
A freeze on recruitment is another way of reducing the overheads within your business.
Voluntary Redundancy
Voluntary Redundancy may be another possible alternative to consider. It could be that for some individuals leaving an organisation with a voluntary redundancy package could suit them at a certain stage in their lives.
All businesses should review the above options before they make the decision to go down the redundancy route. If you have any queries or require any additional advice in relation to alternatives to redundancies, please feel free to contact Boyd HR on 074 912 3150.
Created by: Nicola Gallagher, Account Manager, Boyd HR