Redundancy
A redundancy is when an employer terminates someone’s employment because the position is no longer required. An employer must have a genuine work-related reason for a redundancy.
A redundancy must be about the employee’s position, not the employee personally. A concern about how a particular employee may be performing is a performance issue and not a legal reason for pursuing a redundancy.
Process
The law requires employers to provide information to employees when they are considering changes that will affect their jobs and to give them an opportunity to comment and contribute to any decisions.
In some redundancy situations the employer needs to select between employees, for instance where there are two employees doing the same thing and only one is required. Some employment agreements or policies provide the rules for selection (e.g. last on, first off). Where rules are provided they must be followed. Where there are no rules, the employer needs to consult the potentially affected employees on how the selection might be made and consider any feedback the employees provide about the selection process.
Before anyone’s employment is terminated, the employer must consider possible alternatives, such as appointment to another role (i.e. redeployment). Unless the employment agreement says so, there is no obligation to redeploy. However, where there are vacant positions that the redundant employee could fill without difficulty or cost, an employer, acting in good faith, will at least have to consider offering one of those positions.
When a decision to proceed with a redundancy is made, notice must be given to the employee, as well as any other contractual entitlements such as redundancy compensation. An employer has an obligation to pay redundancy compensation where the relevant employment agreement provides for that. If there is no provision, an employer can still choose to pay redundancy compensation. Any entitlement to annual leave should be included in the final pay.
In addition, employers may consider providing other support or assistance, such as counselling, help writing CVs, time off to attend job interviews etc. This type of assistance is sometimes required by the employment agreement or policy.
An employer may not make someone redundant for being pregnant or for applying for parental leave. However, the law does not prevent employees on parental leave from being made redundant for legitimate reasons. However, it must be for a good reason and must be done fairly.
Employees can raise a personal grievance if they believe their employer has acted unjustifiably. If the grievance is not resolved by the parties themselves or by mediation the Employment Relations Authority or the Employment Court will look at each case individually, including whether:
- the redundancy is for genuine commercial reasons
- the provisions of the relevant employment agreements have been observed
- the employer has acted reasonably and fairly in the way the redundancy was carried out.
