The spread of Covid-19 has presented businesses with many unprecedented challenges. Unfortunately, due to this current climate, a lot of companies are being faced with the tough decision of having to make some, if not all of their workforce redundant. When any business is faced with this decision it is extremely important that they follow the correct procedure.
The important point to remember is that Redundancy is the termination of employment and the employer is obliged to show that the dismissal was affected fairly, otherwise the individual(s) may bring a claim for Unfair Dismissal.
To avoid such a claim, you have to show:
(1) it is a genuine redundancy;
(2) that the selection method was fair (all employees affected) and reasonable;
(3) that you followed fair procedure when implementing the redundancy.
Considering Redundancy:
Initially, you should exhaust all other measures of saving costs, prior to considering if redundancies are necessary. Redundancy is always a last resort.
Fair Selection for Redundancy:
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- Identify what core competencies are required to sustain the business in the future.
- Identify all the different job categories and identify which positions will be made redundant by Job Title.
- Consider what selection criteria will need to be considered:
- Skills Matrix
- Interview Process
- LIFO- all things being equal
Consultation Process:
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- You should write to the affected employee(s) and arrange a consultation meeting. The consultation period usually lasts 2 weeks and no decisions should be made until after the consultation period is over.
- Explain to the employee that you have had to make this decision and inform them of what alternatives you have looked at including cutting costs (reducing staff costs, short-time working, temporary lay-offs, operating with less staff, etc.) but nothing stems from the loss of income.
- Be compassionate to the employees that are directly affected.
- Invite the employee(s) to offer alternatives to redundancies.
- It would be important to take minutes of every meeting you have with the employee(s) around discussions of redundancy.
- At the end of the consultation period if the decision is still to make the position redundant it would be important to offer the employee(s) the right to appeal the decision.
Notice Requirements:
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- Following the consultation period, the employee(s) must be given at least two weeks’ protective notice before the proposed date of dismissal.
- Employers must comply with the notice requirements under the Minimum Notice and Terms of Employment Acts 1973 to 2005.
- Notice must be given to the employee(s) in writing.
- You need to confirm with the employee(s) what their statutory entitlements would be.
- Only individuals with 104 weeks of reckonable service or more are eligible for Statutory redundancy payment – 2 weeks’ pay per year of service plus 1-week.
If you have any queries or require any additional advice in relation to redundancies, please feel free to contact Boyd HR on 074 912 3150.
Created by: Nicola Gallagher, Account Manager, Boyd HR