Making an employee redundant
Staff selection - non-compulsory
There are two main methods of making staff redundant - non-compulsory and compulsory. Here we look at the non-compulsory options.
Voluntary redundancy
With this method the employer selects from a list of employees who have volunteered to be considered for redundancy.
Some of the advantages:
- less demoralising for the workforce than compulsory redundancy
- less disruptive, provided the right people volunteer
- less work to check that redundancy selection criteria are fair
Some of the disadvantages:
- often more expensive - longer-serving employees requiring higher redundancy payments tend to volunteer
- you may need to offer enhanced redundancy payments to attract people to leave
- you may get more volunteers than needed - those not selected may react negatively
- you could end up with an imbalance in the skills and experience of remaining employees
To prevent imbalances, many companies' redundancy policies confirm management's right to decide whether a particular employee should be allowed to leave.
Early retirement
Some of the advantages of early retirement:
- often an acceptable alternative to redundancy for employees and trade unions
- less harmful to employee morale than compulsory redundancy
- opportunities to promote junior employees if those retiring occupy more senior grades
Some of the disadvantages:
- can be expensive compared with a one-off voluntary redundancy payment - the company may have to fund a long-term pension
- for specialised jobs it may be hard to find new staff if business improves
Different laws govern Northern Ireland. For information call the Northern Ireland Redundancy Payments Helpline on Tel 0800 585 811.
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