The outlook for the Irish economy post the COVID-19 Pandemic is bleak with forecasters predicting up to 675,000 people losing their jobs before the economy starts to improve. To survive, certain Owner/Managers of SME’s will have to face restructuring their businesses resulting in job losses by way of redundancy. The first thing for Employers to note is that a redundancy is a dismissal of employment and if not done properly could result in a claim under the Unfair Dismissals Acts 1997-2015. The Employer will have to show that the dismissal, by reason of redundancy, was effected fairly.
Three (3) key elements in a redundancy situation:
1. The redundancy must be genuine;
2. The selection process is fair, and
3. Procedure must be followed.
For a redundancy to be clearly genuine and unavoidable, there must be no real prospect of alternative employment. Critically important it is the Position that is redundant (or being proposed for redundancy) and not the person – the roles or tasks associated with the position that may be redundant and not the Individual. The redundancy impacts on the job and only as a consequence of the redundancy does the person involved lose his/her job.
Selection of employees for redundancy must be based on objective criteria. The employer must show objective reasons for doing so. Different criteria may be used for different areas of the business. Last In First Out (LIFO) for general positions of similar value is commonly used. The Interview Process or the Skills Matrix are also objective means for selection. The Skills Matrix will be company specific. It entails the employer identifying the knowledge, skills and experience required to allow the business to continue as a going concern. The best advice is to look forward rather than backwards on what the business will need in the future. The selection criteria may include: qualifications; relevant experience; skill level; flexibility; cost of employee; training.
Proper and timely information and consultation should be afforded to Staff whose positions may be affected by redundancy. It is important to inform staff that you are contemplating a restructure of the business. Emphasise that your priority is to avoid redundancies where possible and that you are giving full consideration to possible alternatives in consultation with staff. Alternatives may include a reduction in pay; short-time working; temporary layoff.
At the end of the day, redundancy is termination of employment. If it is your very carefully considered opinion that the position is redundant and you decide to terminate the contract of employment of the individual occupying that position, you should always afford the individual the right to Appeal that decision to someone who was not party to the redundancy process up to that point.
If you are contemplating a restructure of your Business out of necessity, resulting from the impact of COVID-19, resulting in having to make a number of positions redundant, then please call Michael in Boyd HR, without obligation, for clear guidance of the process.
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