A redundancy is when an organization reduces their workforce due to a position or a role that is longer needed. Organizations may mostly offer redundancy packages, which are financial incentives to staff to voluntarily leave the organization, which may allow employees to self-select who leaves, rather than being pushed into a forced redundancy.

Despite the fact that redundancy is the last thing that every employer considers; it is still an essential part of an organization’s survival kit during challenging economic times.

What constitutes the grounds of a redundancy?

There are various factors that lead an employer to conduct a redundancy; a redundancy can be due to:

 1. The need for an employee being ceased

 A redundancy situation may occur when the organization continues to operate but there is no longer the need for the skill the employee was hired for. 

Examples of this could include an employee who was hired to be a data entry specialist, it might be that the employer might have developed a more efficient cloud system which replaces the need of entering information manually, in this instance the data entry employee might not be needed any longer.

 2. Part of the business being closing down

It might mean that the organization is closing down some operations and going through some restructuring processes; this could be due to the fact that the selected services or products are not particularly needed in the area, which therefore leads to the organization discontinuing their operations. 

 3. The business being transferred to another employer 

This often occurs when the organization has been bought by this party, which already has their own employees, which will mean that the current employee or employees are not needed any longer.

Kindly note that a redundancy is not the same as dismissing an employee due to low performance or conducting a summary dismissal; you cannot use a redundancy to dismiss an employee that is seen to be a bad fit. After that being said, one may ask themselves, is there an alternative to redundancy? The answer to the question is yes, some employers are keen to find alternatives to making their employees redundant.  Alternatives include the following: 

• Reducing the employee’s hours 
• Offering an early retirement 
• Retaining employees to work elsewhere in the business
• Offering training on a new skill

However in instances where a redundancy is still inevitable, the organization will have to go through a redundancy consultation period, this will depend on the number of the employees the organization needs to make redundant.

How do you choose which employee to make redundant? 

Although redundancy is not an enjoyable process to go through, employers must be strategic in the way they select employees for a redundancy. Failure to follow the correct procedure for redundancies, will employers and their organizations open to time consuming and costly legal challenges for unfair dismissal. 

Failure to follow the correct procedure is not only costly, but it also leaves employers with an ill-equipped workforce which will help employers return to growth. There are 3 main steps for selecting employees for a redundancy:

• Identifying where cuts are needed and how many redundancies need to be carried out
• Determine the redundancy selection pool
• Set a clear objective criteria to help in deciding which employees should be made redundant.

Redundancies need a difficult process to go through, and as employers, it is important that you find ways to avoid redundancies by perhaps hiring more freelancers to carry out certain tasks within your organization, in order to save you the stress of going through a redundancy selection process. With a freelancer it is easier to end a contract, than it is with an employee.