Managing Redundancy - Coursework Example

Managing Redundancy Institution: Date: Introduction Losing a job is one subject that people rarely think about when securing an employment opportunity. In another view, the employer does not really hope to lose employees, especially the good ones, for any reason when hiring them. However, an employee will not stay at a single company for the rest of the entity’s life; they will always leave for one reason or the other. There are various forms in which an employee can lose their jobs, or ways in which an employer may seek to release an employee. Such ways include retrenchment, sacking, temporary dismissal, demotion and redundancy, with the latter being the subject of this discussion. Ideally, just like hiring, recruitment and employment of personnel, have to follow some set rules, laws and regulations. These laws and regulations are designed to protect the rights of both the employer and the employee, and they vary from one country or region to another. Relatively, this discussion seeks to details redundancy in terms of its universal definition, reasons for redundancy and the procedures involved. To connect the details with a practical scenario, the discussion puts the UAE, Poland and Australia into consideration as case studies for comparison. Redundancy When an employer opts to scale down the workforce by dismissing some of the employees, the exercise is known as redundancy. This means that when an employee is laid off, the positions they leave should not be filled by another, otherwise that would not be an exercise of redundancy. This necessitates the need for employees to know about their rights and grounds on which redundancy is valid. In most cases, the main reason for redundancy is irrelevance of a position after sometime when the services of such a position are not necessary for business. At the end of the day, the employer must have a genuine reason for terminating an employee’s employment, at least from the perspective of moral justification. Also, redundancy is never about the employee personally, but solely about the employee’s position – it is about the necessity of the given position (Acas, 2012), say a banc assurance officer in a particular bank; this position may become unnecessary if the bank opts out of the insurance business, but that does not render the officer irrelevant as well. In other instances, a position can be eliminated, but the functions transferred to another department; this is still redundancy. Causes/Reasons for Redundancy An employer may opt to evoke redundancy for various reasons; Technological advancement and acquisition of the same by the company may render certain jobs unnecessary as a human resourcerequirement. The company usually realizes this when they do an analysis of the operations. Technological advancements and embracement of the same have rendered human resource unnecessary for certain jobs. This happens when the technology at hand speeds up the process and gives better results, hence automation of systems, which enhances business. Another reason would be when the subject job that one was hired for no longer exists. Some jobs positions are created temporarily and the employees for these positions are hired on contract. This usually happens when certain projects, especially in the engineering sector, require inputs of certain professionals whose services would not be needed after completion of the given project. The only supposed good feature with this is that the employee is aware of such from the start so that it does not come as a surprise once the project is completed. Sometimes the employer may need to cut down on costs, in terms of salaries and wages, by reducing the number of staffs. This is always a tricky scenario for the employer because they have to analyse and single out the position that the organization can do without. It can be very disastrous to relinquish positions and offices without considering the impact it would have on the business. However, after choosing the positions to close, the employer has to inform the current holder of this position in advance, and hold a discussion to explain the intended action. In most case, this action is normally temporary and the leaving employee is assured of the position once it is re-established. An even more serious cause of redundancy is when the business or the organization is closing down or moving to a different location. In such case, the extent of redundancy can be so big that all of the employees have to be relieved of their jobs. In the event that the organization is moving to a new location, those employees who are flexible and willing to move might be offered a chance to move their too. Once, again the different aspects or redundancy are under the guidance of laws and regulations that vary from one country to another. In other instances, when the business entity is bought by another company, the new owner may opt to recruit their own staff comprising new employees. Since this change of ownership is gradual and dynamic, the former owner has to inform the employees in good time. This gives them a chance to make decision or seek alternative employments by the time the business changes ownership. Stages of Redundancy According to a publication by Oxford University (2014), redundancy is comprehensive if it follow some six stages are listed below. Redundancy may not necessarily be inevitable but it is vital to have such a procedure in place to oversee a smooth transition through the process. I. Establishing a business case and identifying the most appropriate pool This is the first stage and has to be factored in, irrespective of the reason or cause for redundancy. At this stage, the organization has to establish a genuine and concrete business reason for pursuing redundancy as the only option. If this business case is valid and permissible, the organization has to explain it to the concerned authorities and staffs within the organization. The subject business case is supposed to explain the adversaries the redundancy is supposed to remedy, and the benefits that the organization will get out of it all. It may materialise from internal planning, as is in most scenarios, whose objective is to remedy any current financial limitations (Oxford University, 2014).  As highlighted earlier, the business reason behind redundancy may take any format, as long as it gives a clear validation for rendering some positions non-required. Establishing a valid business case for redundancy helps in identification of the potential and appropriate pool or department of positions to be relinquished. However, the business case has to explain whether the potential pool has some activities that have to cease, if the activities have to be reduced or merged with others, or if certain jobs are interchangeable. II. Information of relevant specialist. In this case, the human resources manager has to be informed about the necessity of an intended redundancy. The human resource manager is best placed, by training and by position, to handle the action of handling the affected employees, through this process. Such cases are quite serious and sensitive when they involve terminating contracts before the stipulated period elapses. The human resources manager or director will have to arrange for any necessary support that the affected department will or may need. According to the publication by Oxford University (2014), the directions that the HR manager gives remain part of subsequent stages of the redundancy procedure. This leads to the third stage where the HR managers directs and arranges for information and consultation with staffs from thee given department or positions. III. Warning and consultation The HR manager does not have to meet with all of the affected employees, if they are many, but the given department can chose a representative to sit in the meeting. This representative, mostly the departmental head, is to represent the interests of the employees and to communicate agreements and disagreements to those they represent. The meeting is not meant to be argumentative and hostile, but to seek an inevitable solution to compulsory redundancy, it not a middle ground. In so doing, the management show some kind of appreciation to the employees. Such a procedure and approach makes the process easier as either side understand each other’s position. As Ombudsman (2009) postulates, the acceptable period of notice varies depending on the period that the employee has worked, and subject country as well. IV. Exploring Alternatives to redundancy. In the event that compulsory redundancy is unavoidable, the affected employees may opt to resign within the week of notice. In such a case, the leaving employees may not be re-employed in the future. This is different from a case where the employer is willing to rehire a former employee once the organization regains financial stability, or remedies the cause of redundancy. The other alternative is early retirement of old guards within the organization, whose services the business can do without. This relooks at the business case highlighted earlier, where the position facing redundancy has to be one that does not interfere with the achievement of organization objectives, if relinquished. V. Compulsory dismissal This stage usually takes course if none of the alternatives to redundancy has been evoked within the notice period. In most cases, the organization may not have identified the particular persons to be dismissed, if the whole department is up for redundancy. As such, this stage is a mini-process in itself, since the management has to do a fair selection process, give a short notice period and facilitate redundancy payment. Not universal to all organization but certain criteria of selection looks into aspects such as employee’s experience and skills, discipline or attendance records and aptitude for work. Even to emphasize on fair play, some organization will require that the selection has to be reviewed by an authorizing management for approval. The employees selected for dismissal under the process are entitled to a redundancy payment, depending on how long they have worked for the organization continuously. As is evident, these are just but general aspect, since differ from one organization to another and also depends on the law of the land. Much of these differences or similarities will be detailed later on as the discussion takes to compare redundancy in UAE, Australia and Poland. VI. Appeal An affected employee opting to appeal the whole process, according to Oxford University (2014), should be last stage of the redundancy procedure. This provision may not be available in some organizations, or other countries like the United Arab Emirates where redundancy does not required any explanations. Nonetheless, at this stage the affected employee may appeal, within the notice period, against grounds on which the redundancy idea was established. This has a lot to do with the business case or reason which is to act as the basis that necessitates the redundancy. This subject may be beyond the scope of this essay but ideally, the appellant’ sentiments have to be realistic, and can be heard by an external committee. Comparison of Redundancy in UAE, Australia and Poland Redundancy in United Arab Emirates As mentioned earlier on, in UAE, the concept of redundancy is not really recognizable, at least not by the labour laws. This is to mean that the legal system in UAE does not have a legal definition for redundancy. In this setting, the employer is not restricted by any mandatory requirements of notification to the ministry of labour, before serving an employee with a notice of employment termination. All the same, the case study report titled General Overview Employment Law/United Arab Emirates by L & E Global gives an overview of the UAE laws regarding employment. According to L & E Global (2014), employment relationships in the private sector in the UAE are subject to AE Federal Law No 8 of 1980. This federal law governs the relations between the employer and the employee, as well as protecting the rights of either side. However, it does not make direct reference to the redundancy concept. As such, redundancy is handled in similar manner that termination of employment would be.Precise to management, the affected employee has to be provided with a notice, whose validity depends on the period for which a person has worked continuously, with a minimum of 30 days. In addition, the cause of dismissal has to be connected to the employee’s work aspect, and according to provisions of Article 120 of the UAE Labour Laws. This Article 120 provides grounds on which an employee may be instantly served with a dismissal. The laws also require that the employee be compensated for any accrued benefits and in case of lieu of notice. Also, the laws oblige the employer to repatriate the employee to their former positions if they do no secure employment elsewhere, within a stipulated period. Redundancy in Australia In comparison to UAE, the Australian government established the National Employment Standards as an authority that oversees the new workplace relations system within the country. This new workplace system was created in 2009 and dubbed the Fair Work Act of 209. The National Employment Standards (NES) gives full independent reference to the concept of redundancy separate from the normal termination of employment or contract. In terms of management, the Fair Work Act applies to all employees in Australia. The Act spells out the minimum notice period that an employee may be served. This period depends on the period of continuous service with the employer at the end of the day of notice. It mainly emphasizes on the notices period and gives gull recognition to deserved redundancy payment of the employee (Ombudsman, 2009). Redundancy in Poland Poland is a country in Europe and so presents a good comparison in terms of geographical location, which may have an inclined influence on the subject matter. In Poland, redundancy can either be in form of ordinary dismissal or summary dismissal. In summary dismissal, the reasons have to be as serious as an employee’s breach of duties, offence or incapacity to work. Also, the period of notice, in Poland, is as not restrictive as it is in the UAE, but has to be within one month.The dismissal must be in a written form and the employer must inform the employer of their rights to appeal if they so wish. However, a section of workers in Poland are protected from any form of dismissal in case of redundancy. Such workers include members of a trade union, members of the works council, those in justified absence from work, justified leave and any employee has four or less years to retirement (Deloitte, 2013). Interview Questions on Redundancy 1. Does the employer have to consult employees about redundancies? This depends on the level of redundancy that is to take place. In most cases, as the discussion highlights, the employer will have to consult the affected employees individually, if they are less than 20. If the dismissal is to lay off more than 20, then the employer will consult with a representative of the employee, who is usually a departmental head or a union leader. However, it all depends on the legal requirement of the given country and the policies of the organization. 2. Does the employee have to work during the notice period? The notice period is meant to allow the employee an ample time to prepare for the loss of job and to prepare to leave. Basically, it is supposed to make the transition easy and smooth for the affected employee. However, they are working day during which they have to report to work as normal. These days are compensated for as worked days, leave days or in the redundancy payment. If one chooses not to work during this period, they may lose their rights to redundancy pay and other compensation or benefits. 3. How would one know if they are made redundant? This is quite direct due to the fact that the employer has to issue notice of the role played being at a risk of redundancy. The notice spells out the period of redundancy and during which consultation begins. The notice also explains to you the business rationale that necessitates redundancy of your position. Besides that, the employer has to work closely with you in trying to explore alternatives to the redundancy. 4. How much pay does one get whey made redundant? Essentially, the national laws do not spell out the exact amount that one is supposed to be pay for redundancy. Different organizations have handbooks that outline their ways of compensating in case of dismissal on redundancy grounds. However, statutory laws state minimum pays depending on years of work, years of works, experience and such like factors. Reference List Ombudsman. (2009). Notice of termination and redundancy pay and the National Employment Standards. Sydney: Australian Government. L & E Global. (2014). Memorandum: General Overview Employment Law/United Arab Emirates. Brussels: L & E Globa. Deloitte. (2013). International Employment Law: Redundancy and Termination in Europe. London: Deloitte Advokatfirma AS Oxford University, (15 December, 2014). Redundancy procedures. Retrieved May 18, 2015from Acas. (2012). Redundancy handling.Retrieved May 18, 2015from Read More