What is Managing Employee Redundancy in the workplace?: HR Term Explain

 What is Redundancy ? 

The termination of the service of employees by an employer on the grounds that such employees are in excess of the number of employees required by the employer to carry on the business. 

The dismissal which is not related to the conduct or capability of the individual or to retirement upon reaching the pre-defined age or resignation at will by the individual for his own personal reasons.

This can be caused by organizational downsizing, the retirement of older employees, or the transfer of employees to other departments. Here are some examples of situations where employers may have to let employees go due to redundancy.

• Termination of business
• Termination of job title
• Limited funding
• Relocation of business
• Loss of Business/orders/Market Share 
• Introduction of new technology.
• No demand for specific work.
• Outsourcing of Positions
• BPO
• Surplus Of man power 

What are the benefits of Redundancy?

• It can help to improve the efficiency of an organization by removing underperforming employees.
•  Motivate employees to work harder, as they may be worried about being made redundant themselves.
• It can help to reduce costs by eliminating unnecessary positions.
• Help to improve communication and cooperation within an organization as employees work together to ensure that everyone is doing their part.

What are the different types of Redundancy?

There are two types of redundancy: voluntary and compulsory. Voluntary redundancy is when an employee leaves their job of their own accord, usually in order to take another job that is more suited to their skills or to receive a redundancy payment. Compulsory redundancy is when an employee is made redundant by their employer, often because the company is downsizing or restructuring. 

The difference between redundancy and layoffs

Layoffs typically occur when an employer can no longer provide work for their employees. Layoffs can either be permanent or temporary depending on the state of the company. Similarly, redundancies can also occur as a result of a lack of work, but they can also occur due to other situational factors such as business termination or relocation.

The difference between redundancy and downsizing

Downsizing is when a company reduces its size. This could be because they’re preparing for a merge or  trying to balance their finances in response to an economic downturn. In this way, downsizing is similar to redundancy, but with downsizing, sometimes employers offer employees the option to transfer to another company location.

Focus On Redundancy ?

when it comes to redundancy decision, the management should never focus on the individuals job holder and concentrate on a particular positions in the organization. The process should be never aimed at getting rid of individual who has a bad history or trouble makers in the organization.

Parties Involved 

• Management.
• Unions. 
• JCC - Joint Consultative Committee. 
• Employee Representatives.

Discussion Points 

Following salient points are considered to discuss with the other parties and the management has to pay special attention towards below factors to create a successful dialogue between employees/ representatives and the management.

• Reasons For Proposals.
• Affected Employees.
• Selection Criteria.
• Dismissal Procedure.
• Redundancy Payment.
• Other-retaining/deployment.

Procedures required for selection 

The selection of people to consider for redundancy has to be done with a careful attention and standard criteria has to be adopted in order to eliminate the discrimination. The employees as well as the other stakeholders have to perceive the redundancy process as a fair process and transparency has to be maintained throughout all the activities.

Criteria to be used in selection 

• Length of Service 
• Qualification and Experiences.
• Performances.
• Attendance records.
• Disciplinary records.
• Interview Process.
• Adaptability.
• Extra Skills.

Minimize Redundancy 

As a responsible employer, the appropriate steps has to be taken to avoid or minimize the redundancy at all levels since it causes numerous-ill effects among the employees and other related parties.

• Constant monitoring of external environment.
• Natural Wastage.
• Reviewing of staffing levels.
• Review working practises .
• Reduce sub contracted work.
• Consider alternative work arrangements.
• Early retirement.
• Freeze Recruitment.
• Reduce/ eliminate overtime.
• Re-training or re-development. 

Dismissal Procedure.

• Notify employee with reasons.
• Arrange a meeting.
• Hold the meeting in the presence of rep.
• Notify the decision and right to appeal.
• Appeal meeting.
• Inform the decision.

Skills required to manage redundancy.

Most of the mangers lack the special managerial skills required to handle  very sensitive, complex, and unforeseen issues whilst  in the process of redundancy. These skills would help to ease out the related issues and create a win-win situation for both parties affected.

• Planning.
• Implementation of  plan.
• Communication .
• Grievance Handling.
• Counselling.
• Inter-Personal skills.
• Ability to convince.
• Effective leadership 
• Presentation skills.

Redundancy Policy.

    It is essential for the organization to be more systematic and rationale when managing employee redundancy. In most organizations, the redundancy policies are promulgated and carry out the process according the plan. The objectives of promulgating a redundancy policy are as follows.

• To maintain industrial harmony.
• To minimize uncertainty.
• To manage compensation.
• To maintain current business process.
• To provide required training/skills.
• To be transparent.
• To monitor the progress.

Types Of Approaches.

• Ad Hoc Approach.
• Formal policy proposed  by management.
• Formal agreement with employee representatives.

Redundancy Process.

1. Notify the redundancy payment service before first consultation.

2. Consult with trade unions representatives or elected employee representatives.

3. Provide information to representatives or staff about the plan redundancies.

4.Respond to any requests for further information.

5.Give any effected staff termination notices and show leaving date.

6. Issue the redundancy notices.

Social Effects On Redundancy Employees/ Family

• Unproductive  in society.
• more labour less job.
• Families will face danger.
• Family conflicts.
• Involve in unethical things.
• Mental condition low.
• Physical Condition low.
• People will go for suicide. 

Effects On existing Employees.

• Less Productivity.
• Employee Conflicts.
• Trade Union Action  will rise.
• Quality of  production less.
• Good will, image of the organization goes down.
• Recruitment will be high.
• Low of profit.
• More work load.
• No innovation.
• Less job security.

Legal Aspects.

The main legislation covering redundancy as follows,

1. Termination Of Employment Of Workmen.( Special Provision Act) Act  No 45 of 1971.(TWA)

2. Amended Act  No 45 Of 1971 by Act No 12  Of 2003 (TEWA).

Expectations 

• Employer with less than 15 workmen for 06 months.
• Employee work less than 180 days in 12 months.
• Government/ Local Authority.

If a company has less employees during  6 months this will not applicable.

Non Disciplinary Termination.

TWA NO 45 Of 1971 Says: 

No employer shall terminate the scheduled employment of any workman without:

• The Prior Written Consent Of  The Workmen Or.
• The Written Approval Of The Commissioner Of Labour.

Application To Commissioner Of Labour To Reduce Staff

1. Application has to be submitted to the commissioner of labour and written approval must be obtained.

2. The application should set out the reasons and justifications.

3. A copy of the application should be given to the employee.

4. The employee will be given a hearing by the Commissioner of Labour.

If the Commissioner decide to grant approval, he is required to order the payment of compensation in terms of the current formula applicable. Section 6D in Act No 12 of 2003 provides that any money to be paid as compensation to the workman on decision or order made by the Commissioner under the act shall be computed in accordance with such  formula as shall be determined by the Commissioner in Consultation with the minister.

How Long  does the redundancy process take ?

The time it takes to complete a redundancy process will be determined by how many employees are involved.

• 19 or fewer redundancies: with consultations held on an individual basis, there are no time limits but the process typically takes around a month.

• 20 – 99 redundancies: collective consultation has to start at least 30 days before employees can be dismissed.

• 100 or more redundancies: consultations must start at least 45 days before dismissals come into effect.

Conclusion  

Redundancy is an inevitable process that can occur in any organization. Employers must ensure that they follow the correct procedures and provide support to affected employees during the redundancy process.

The subject of  workplace redundancy can be a tricky one to navigate. It is a controversial topic that has lasting effects on  both a business  and the employees who were made redundant .

As an employer , it is necessary to handle the redundancy process as equitably  and honesty as possible. The decision  to make  certain  roles  redundant should always  be taken  seriously .

Video  

References 

1. Philip Hyland,(2018) A Practical Guide To Redundancy 

2. Gordon Adams,( 2009) Overcoming redundancy: 52 inspiring ideas to help you bounce back from losing your job

3. Philip Hyland,( 2018) A Practical Guide To Redundancy

4.Rebecca Corfield, Barry Cushway,( 2009) The Redundancy Survival Guide: Assess Your Legal Rights, Explore Career Options and Turn Redundancy Into Opportunity

5. Philip Hyland & Collette Moore, A Practical Guide To Redundancy – Second Edition

6. https://www.davidsonmorris.com/redundancy-process/

7. https://www.gov.uk/staff-redundant

8. https://www.fairwork.gov.au/ending-employment/redundancy

9.https://www.pelagohealth.com/resources/hr-glossary/redundancy/

10.https://www.acas.org.uk/manage-staff-redundancies

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