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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.

Collins Dictionary of Business, 3rd ed. © 2002, 2005 C Pass, B Lowes, A Pendleton, L Chadwick, D O’Reilly and M Afferson


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.
Collins Dictionary of Economics, 4th ed. © C. Pass, B. Lowes, L. Davies 2005
References in periodicals archive ?
The company has said that the redundancies are concerned with a particular part of the factory and that its overall outlook for the plant was "very positive".
Ford said it's not considering compulsory redundancies at the Bridgend plant because it believes it will "secure an appropriate number of voluntary separations", but didn't confirm what would happen if there wasn't enough interest.
The 44-year-old from Cumbernauld was working as a fabricator for a company in Bellshill last October when it announced redundancies.
"We get information about those notifications or we find out about redundancies through the media or by using local knowledge.
In the authorization access control model, if the policy loaded on the PDP contains lots of redundancies related to policy/rule combining algorithms, it not only consumes and wastes lots of system resources, but also greatly increases the time the PDP spends in evaluating access requests.
"This branch calls on the university management to abide by the existing agreement on the avoidance of compulsory redundancies and thereby avoid compulsory redundancies and to enter into negotiations with BUCU."
In a newsletter to union members, NASUWT said Pensby High School, Kingsway Academy and Upton Hall School, in Wirral, are "already consulting on proposed redundancies".
Following a meeting a statement by the UCU said: "The university stated that it did not intend to proceed with its proposed changes to terms and conditions of employment for existing staff, and that it did not intend to make immediate compulsory redundancies.
"Huge golden goodbyes undermine the long-term savings that necessary redundancies are meant to make and show that contracts in the public sector are badly negotiated at the outset.
This decision confirms the accepted principle in this area that, provided an employer acts reasonably in how he effects any redundancies, it is not open to the Tribunal to substitute its own views as to how the redundancies should have been carried out.
I'VE heard Cllr Dunning announce his success with recent redundancies a couple of times now and about how the 500 job losses only resulted in six compulsory redundancies.