Redundancy and business reputation: Why an effective process is crucial

Earlier this year, P&O Ferries dismissed 800 employees without notice via video message. The backlash that followed was on an unprecedented scale, with UK MPs even voicing their disapproval over the handling of the redundancy situation.

Employment legislation in Ireland is not the same as in the UK when it comes to redundancy. With redundancy in Ireland, certain processes must be followed to ensure you, the employer, conduct a fair redundancy process.

This is important to not only avoid an employee claim but to also protect your business’s reputation.

The need for a genuine redundancy situation

Redundancies don’t always come about due to a lack of work. A genuine redundancy situation can be the result of business closure, financial difficulties, and even new technologies.

Once you’ve established the genuine redundancy situation, fair procedures must be used before any dismissal. You must also show that the redundancy selection process was fair. These steps are crucial as unfair dismissal claims often occur when an employee questions the redundancy procedure.

To avoid any business reputation fallout, put a Redundancy Policy in place. In your policy, outline the redundancy procedure and its steps, including:

  • Notification of potential redundancy
  • The steps of your consultation process
  • The redundancy selection process

Steps of a fair redundancy process

Unfair Dismissal legislation includes a “reasonableness” test that your redundancy process must pass. This requires you to undertake a redundancy consultation process whereby you meet with affected staff with the aim to confirm that they:

  • Understand the redundancy situation and why it’s happening.
  • Agree to a method for selection.
  • Are able to explore alternatives to redundancy.

Employees must also be given the option of having representation during this process. Only once you have concluded your consultation meetings should you inform the employee, by way of a termination letter outlining their entitlements, that they’re being made redundant.

A fair redundancy process and the importance of reputation in business

Businesses with great reputations are perceived as having stronger values and more to offer. These businesses appeal to top talent and experience better growth, as consumers will find them more trustworthy than a competitor with a weaker reputation. So, it’s important that you don’t let a flawed redundancy process undo all your good work.

The P&O situation is an example of how important it is to follow a proper redundancy process. Not doing so can damage a business’s reputation and lead to further issues, such as consumer backlash and struggles to recruit new staff.

Need further advice on managing a redundancy process?

If you need help managing a redundancy process or developing a positive business reputation, we can help. Speak to an expert on 018 86 0350 or request a callback here.

 

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