Restructure and Redundancy

Restructuring is an effective way to implement changes to your business leaving open the opportunity to outsource, introduce technology, reassign work duties, increase the efficiency of your business, or to save money. 

However, without carrying out proper process and due consideration, an employer’s decision to terminate an employee on the grounds of redundancy may be challenged through the personal grievance process.

In the past, the Employment Relations Authority / Employment Court primarily focused on the consultation process followed by an employer. However, recent case law has suggested employers are subject to greater scrutiny regarding the employer’s commercial decisions behind a restructure.  This may include providing an employee with supporting documents at the outset to justify an employer’s proposed decision.

 

An employer is susceptible to claims of unjustified dismissal when terminating an employee on the grounds of redundancy if:-

  1. There is not a genuine commercial reason for the redundancy, and the decision was not one of a fair and reasonable employer; and

  2. A full and fair consultation process was not carried out.  The requirements for a full and fair consultation process are onerous and must be complied with. 

If you are an employer and are considering restructuring your business and/or would like to terminate an employee on the grounds of redundancy, or if you are an employee and believe you have been unjustifiably dismissed through redundancy, please contact a member of our Employment Team for advice.

Article by Penny Kean