When employers wish to make employees redundant they must follow a clear and fair process. The Labour Relations Agency has a redundancy flowchart which can help employers and employees in this situation.
Redundancies generally happen when an employer needs to reduce the workforce, for example if a type of work is no longer required or if fewer employees are needed for a particular kind of work.
Normally the employee’s job must have disappeared; it is not redundancy if the employer immediately takes on a direct replacement. The employer could, however, recruit more staff for work of a different kind, or in another location.
Sometimes redundancies and / or redeployment of labour become necessary due to changes in markets that organisations must react to in order to stay in business and remain competitive. Sometimes redundancies happen because the workplace is closing down altogether.
Planning for and handling redundancies carefully and with great sensitivity is crucial. It will help minimise emotional distress for the individuals affected. It will also help minimise damage to organisational performance which can happen when there is uncertainty or poor management of the situation.
Organisations can potentially avoid or minimise the need for redundancies by planning their labour requirements very carefully. Employers should also establish an agreed procedure for handling redundancies, which demonstrates a fair and objective approach when selecting members of the workforce for redundancy.
If an employer is considering making an employee redundant, they must follow a standard dismissal procedure – See Dismissal. However, the procedure does not apply to some collective redundancies.
Bumping is a term used to describe a situation in which, for example, a more junior employee is dismissed on grounds of redundancy in order to make way for a more senior employee whose post has become redundant. The lawfulness of such actions will be dependent on the individual circumstances.
See the Redundancy pay page in the Hours and pay section.
Temporary lay-off and short-time working
From time to time employers may experience a temporary shortage of work and it may be necessary to lay-off all or some of their employees in order to preserve long term employment security. If temporary lay-off is being considered there are important aspects of employment and contract law to take into account.
The right to lay-off employees without pay depends on the contractual position, i.e. whether it is permitted by the contract of employment. Where it is imposed by an employer without a contractual right to do so, employees could pursue claims to the civil court and/or to an Industrial Tribunal.
The Employment Rights (Northern Ireland) Order 1996 provides for employees to be paid a guarantee payment if they are on a period of lay-off or short-time working. Further provisions establish a procedure whereby employees who are laid off can, in certain circumstances, claim a redundancy payment.
This information note provides some general information on the right to place employees on temporary lay-off/short time working and the rights of employees who are temporarily laid-off.