redundancy


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redundancy

the termination of an individual's employment when the employer ceases trading or the job ceases to be required because of rationalization, change of product etc. When an employer decides to make part or all of a workforce redundant the European Collective Redundancies Directive requires that the workforce be consulted on the extent, distribution and rationale for redundancy. Advance notice must be given with the extent of this dictated by the number of planned redundancies. Consultation must take place with union representatives, specially elected employee representatives where a TRADE UNION is not present, or (exceptionally) directly with all employees.

Employees with more than two years' service are statutorily entitled to a redundancy or severance payment. For adult employees under 40 this is one week's pay for each year of service, for those of 40 plus it is one and a half week's pay for each year up to a maximum of twenty years. Many employers choose to make payments substantially above the statutory level (in some public sector organizations there are special schemes to support this) to sweeten the pill of redundancy.

Selection of employees for redundancy can be a traumatic process and, if the organization is to continue trading, needs to be conducted fairly if the morale of those remaining is not to be irretrievably dented. A favoured option is to seek voluntary recruits for redundancy among older employees, backed up by generous redundancy payments and possibly early access to pension benefits. An alternative method is ‘last-in-first-out’ (LIFO),i.e. those with shorter service are selected for redundancy. Whilst superficially fair the problem with this is that it potentially removes those young workers who have most to offer the organization in the long term.

Whatever the method chosen, redundancy is undoubtedly a distressing process for all those involved. Some more progressive organizations offer counselling services to aid adjustment and to rebuild confidence. Others, especially where very large numbers have been made redundant, have set up employment agencies in an attempt to find alternative work. Although trade unions sometimes declare their intention to fight redundancies, they and their members are generally unwilling to take any form of industrial action since this could imperil redundancy payments. Unions, therefore, usually come to devote their efforts to ensuring that individuals are treated fairly by those handling the redundancy process.

redundancy

the loss of jobs by employees, brought about by company RATIONALIZATION and reorganization that results from falling demand or PRODUCTIVITY improvement. In the UK, adult employees under 40 years of age are entitled to redundancy or severance payment of one week's pay for each year of service, and for those over 40, it is one and a half week's pay for each year up to a maximum of 20 years. See UNEMPLOYMENT.
References in periodicals archive ?
They claim instead of giving them 90 days redundancy notice the council said it believed Tupe applied when ter minating their contracts.
The difficulty with the decision, however, is that just a month earlier the president of the EAT had decided in another case which turned on the same principles and in which the same authorities were cited, that there was a redundancy situation where hours were reduced.
No Gurkhas put in for voluntary redundancy, so the losses may prove to be especially provocative.
The statement said the British army, under the redundancy program, will reduce some 7,000 posts over the next four years, bringing its total strength to 94,350.
Just two employees out of a total workforce of 36 at Remploy's Waterloo factory have applied for voluntary redundancy.
The exact number of people to be selected for redundancy will not be finalised until the voluntary redundancy programme has been completed but it is hoped it will be significantly less than the 93 originally stated.
If your boss follows this process it may be a fair redundancy.
So far 800 people have said they would be interested in taking voluntary redundancy, but Mr Stewart said that does not mean they will get it.
Redundancy is becoming a more common occurrence, and many people will experience it at least once in their working lives.
Employees' rights are governed by employment law (general employment rights; unfair dismissal rights; specific redundancy rights, including entitlement to statutory redundancy pay; possibly TUPE rights regarding the transfer of an undertaking; possibly non-discrimination rights) and by their individual contracts and terms and conditions of employment.
Redundancy is considered a potentially fair reason.
Until now, many financial institutions were satisfied with an operational and data redundancy achieved through the development of backup data centers located within close proximity of their primary facilities--sometimes on the same block, but more often within a one or two mile radius.