Redundancy Policy

What’s a redundancy policy, and when should you use it?

You should have a redundancy policy in place for your employees.

It only applies to your employees, not any other form of worker.

Before you make the decision to start a redundancy process in your business, it’s important to double check that you’ve considered all other options first.

For example, layoffs and short time working may be a better solution for temporary work shortages.

However, if none of the alternative options would work for you, it is likely that you will wish to consider redundancy.

Redundancy is a very process-driven exercise and it’s important to ensure that you take the essential steps at the right time, with the right people and using the most appropriate communications and choice of wording.

If an employee hasn’t yet worked for you for at least 2 years, you don’t need to go through the full redundancy process.

Instead, you can potentially follow a procedure for short-service dismissal.

Take a look at our guide to dismissing staff to find out how to do so fairly.

If an employee has been working with you for at least 2 years, you’ve already ruled out other solutions, and you have valid reasons for making redundancies, then this template policy sets out the procedures that you will need to apply.

You will be expected to follow these properly, to ensure that you do not find yourself facing well-grounded employee complaints.

If you’re making more than 1 employee redundant a collective redundancy situation may arise.

Collective redundancies arise where, during the period of 30 consecutive days, the employees being made redundant are:

• 5 employees where 21-49 are employed
• 10 employees where 50-99 are employed
• 10% of the employees where 100-299 are employed
• 30 employees where 300 or more are employed

In such a situation, you’ll also need to go through an additional process called collective consultation.

This consultation must take place at the earliest opportunity and at least 30 days before any notice of redundancy is given.

Staff generally elect representatives to consult on their behalf.

If your staff have a trade union representative, you’ll need to consult with the trade union and be prepared to work with them before starting the collective consultation process.

If a collective redundancy situation arises you must also inform the Minister for Social Protection in writing of the proposed redundancies at least 30 days before the first redundancy occurs.

We recommend that you do not give this policy contractual status in any employment contract that you put in place, but that you do reference it in that contract, and that you make clear that the employee is expected to comply with the policy and that you have the right to update or revise it, in your discretion and when you want to.

This template includes all the statutory requirements, as well as any optional elements for you to consider.

Of course, having the policy is just the first step.

You need to ensure that once you have your policy in place that you implement it correctly.

Our step by step guide to handling redundancies sets out a practical, easy to follow step by step action plan, including letter templates and checklists, to help you handle redundancy issues with confidence.