Redundancy – What are the variants?

Redundancy is a generic term. Many employers are now facing the prospect first-hand and it’s important that you have an understanding of the different types of redundancy for your employee base.

Firstly, can it be avoided?

When considering compulsory employee redundancy you must first consider if it can be avoided in any way. Methods of avoidance would include (but may not be limited to):

  • Seeking applicants for voluntary redundancy or early retirement
  • Seeking applications from existing staff to work more flexibly than they have previously
  • Laying off self-employed contractors, freelancers etc.
  • Not using casual labour
  • Restricting recruitment
  • Reducing or banning overtime
  • Filling vacancies elsewhere within the business with existing employees
  • Short-time working or temporary lay-offs

Voluntary redundancy:

This type of redundancy involves your employee making the conscious decision to accept redundancy based on parameters that you have presented to them.

For the most part, this is a favored approach as there are connotations of a mutual agreement arrangement from both parties. Regardless of agreement, it is important that the employee knows that they are not guaranteed voluntary redundancy simply on the grounds that they have applied. As with statutory redundancy, the process must include a fair and transparent selection methodology.

Early Retirement:

As an employer you are able to offer your employees the chance to retire early. This can be incentivized, this process is often used as an alternative to voluntary redundancy.

The offer of Early Retirement must be made to the entire workforce; individuals must not be singled out due to their age or any other criteria.

You cannot mandate that an employee takes early retirement, it is the choice of said employee based on conditions offered by you as the employer.

Compulsory Redundancy:

This refers to forced redundancies within your business, most likely due to unavoidable or devastating financial hardship. When considering employee selection for compulsory redundancy you must adopt a fair, non-discriminatory process.

For more information regarding selection criteria please visit our related article: Redundancy – aspects to consider for Employers.

If your business is facing the decision of making employees redundant please ensure that you do your research, plan and prepare adequately. Additional information and resources can be found at: https://www.gov.uk/staff-redundant