Redundancy

Redundancy covers the dismissal of employees where:

  • the business in which they work has or will cease to exist;
  • the business has or will cease to exist in the place in which they work; or
  • the requirements of the business for employees to carry out work of the particular kind carried out by the employee either generally, or at the place where the employee works, have ceased or diminished or are expected to cease or diminish.

An employee who has been continuously employed for at least two years has the right to receive statutory redundancy payment if made redundant.

Although redundancy falls under one of the legally fair reason for the purposes of unfair dismissal, the process of making an employee redundant must also be fair in order for the employer to avoid a successful claim for unfair dismissal.  A fair redundancy procedure involves:

  • fair selection of the employees to be made redundant;
  • consultation with selected employees before making a final decision;
  • considering alternatives to dismissal; and
  • considering whether there are any suitable jobs elsewhere in the organisation for the redundant employees and offering any such positions to them.
Employment