Employment Rights Act 1996, along with the Trade Union, and Labour Relations Consolidation Act 1992, is the law related to redundancy. Redundancy occurs when a company wants to decrease the amount of its workforce. The objective of the law is to protect the rights of the employees affected by redundancy. Under the Employment Rights Act 1996, employees have several significant rights, including the right to a fair process, a minimum notice period, and consultation. These regulations place crucial obligations on employers; for example, companies should notify employees about redundancy at least one week in advance if they have been employed for less than two years.
The process of lawful redundancy should follow several steps. First, the organization should consider possible alternatives, such as restrictions on recruitment, elimination of overtime, and introduction of short-time working. Second, an employer should ensure that all parts of the redundancy procedure are considered. They typically include presenting a statement of intent, consultation arrangements with trade unions or employees’ representatives, analyzing details on relocation expenses, and designing policies to support redundant employees. Third, the company should inform employees about possible redundancies in writing, disclosing the reasons for them, the number of individuals affected, and the method of selecting the employees. Moreover, the organization should address the information about redundancy payments and methods of carrying out dismissals. Then, the company should provide redundancy payments to the employees working for at least two years continuously. For instance, individuals between 22 and 41 years of age are entitled to one week’s pay for each complete year of service. It is vital for the organization to address laws on discrimination and ensure that it follows employment equality legislation.
Possible consequences of the organization for not following these steps include higher staff turnover, tribunal claims, and the adverse effect on morale. Tribunal claims may be a result of illegal redundancy or a failure to follow the legal procedure, such as to provide redundancy payment. Staff turnover, in turn, may occur due to the lack of loyalty among the remaining employees after redundancies.