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Letting staff go: how do employers really manage it?


Employees’ skills and competencies are more important than the job they do in selection for redundancy, and the line managers’ verdict is crucial in the selection process, according to a report by IRS Employment Review, published by LexisNexis.

While the law on redundancy selection states that the procedure used must be fair and reasonably applied, the factors affecting the decision vary greatly, the survey of 89 private and public sector employers reveals.

Most respondents (87%) said that they had made employees redundant in the past two years.

These varied from individual redundancies to large-scale job losses such as the 1,000 employees made redundant by a UK charity and 800 employees made redundant by a major manufacturing company.

Overall, 36% of the total redundancies reported by employers were in manufacturing, 10% were in public services and 55% were in the services sector.

In total, survey respondents made 8,041 jobs redundant during the past two years – 8% of the total number of people they employed.

Two-thirds of employers surveyed did not report any productivity improvements as a result of job losses.

Almost two thirds (62%) of employers found that redundancies had led to lower morale, but one in three believed that the productivity of their organisation had improved.

A smaller, but still significant, number also believed that redundancies had led to the loss of organisational skills and organisational memory in their workplaces.

Key findings:

· Just over half (54%) of the survey respondents who had made redundancies said that voluntary redundancy was used while (76%) had made compulsory redundancies. Of the total, 32 (41%) organisations had used both methods.

· Almost half (46%) the respondents reported that workforce cuts were expected over the coming year. Of these, 37% were in the services sector, 39% were manufacturing or production companies and 22% were in the public sector.

· Twenty-one (24%) employers said that they use a straightforward “last in, first out” (LIFO) method of selection for redundancy. Fewer than 2% of employers used length of service exclusively. Over half (53% ) use length of service as a factor alongside the job done by the employee or their level of skills and competencies. Others mentioned that it was use “as a last resort”.

· For those employers (60% of the sample) who use attendance as a criterion, certified absence appears to count against an employee in the selection process almost as much as unauthorised absence. Most employers (81%) said that leave covered by a doctor’s certificate would count against an employee and 87% said that self-certified leave would do so.

· Over half of employers surveyed thought that the forthcoming Information and Consultation Directive would not have any effect on the way they currently consult and provide information to employees in a redundancy situation.

· More than 8 in 10 (84%) of employers surveyed made no changes to their redundancy pay arrangements over the past two years.

· A majority of employers (86%) indicated that they would provide reasonable time off or as much as staff need to look for employment elsewhere.

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