Redundancy laws are laws setting out guidelines for the proper reduction of a workforce. In the United States, shrinking a company either permanently or temporarily is referred to as “laying off” personnel; in the United Kingdom, the term “redundancy” is used. These laws are designed to protect the interests and rights of employees while providing employers with a legal framework to follow when preparing for a reduction in workforce size, protecting employers from the potential for suits disputing the circumstances of a termination, as long as they comply with the law when letting employees go.
Each jurisdiction has unique redundancy laws based on precedent, existing employment laws, and other matters. One important aspect of redundancy laws is a requirement that employers advise their personnel in advance about the planned redundancy. Employees must be given ample warning that firings are anticipated and should be provided with information about how many firings to expect and how the company will make decisions about who to retain and who to let go.
Redundancy laws can also cover topics like how to evaluate the workforce to determine which personnel are nonessential. Employees may be entitled to benefits either from their employers or the government under the law and employers may be required to offer information on how to apply for those benefits. Employees can also potentially challenge decisions made by an employer during a downsizing operation by arguing that the legal process for warning employees and providing notice was not followed.
Human resource departments typically familiarize themselves with all aspects of employment law, including redundancy law, to ensure that they comply with the law during hiring and firing proceedings, including termination for cause, release of employees in regions with at-will employment, and other matters. These departments can also provide information to employees about legal rights, and government agencies are another useful resource for information about employment law and its potential applications.
If a company has violated redundancy laws, it can be subject to civil suit from employees who were adversely affected. There may also be legal penalties like fines, depending on how the laws are structured and what the employer has been done. Employers must take care to document the steps taken in all releases of employees, from redundancies where large numbers of employees are released because they are no longer needed to situations where people are fired for repeatedly failing to comply with warnings about violations of the employee contract and code of conduct.