Free «Dismissal and Redundancy» Essay Sample

Dismissal and Redundancy

Human resource management encounters many personnel-related tasks that should be aligned with the overall business goal in order for a company to stay competitive. Such tasks include not only search and selection of new employees but also dismissal and redundancy of the existing work force. As Dessler points out (2000, p. 379), “it is the most drastic step you can take against an employee and one to be taken with deliberate care.” This paper undertakes an analysis of downsizing practices and best approaches to the procedure by looking into the legal framework of the matter, case study analysis, and alternatives. The benefits of the conducted research lie in obtaining more knowledge on this subject matter in order to be prepared and aware of such practices in companies that give an opportunity to avoid being redundant unfairly. On the other hand, the analysis provides a perspective business manager with understanding of the importance to skip bad practices of employee’s unjustified dismissal as it can be very costly for the business.

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Primarily, there is a need to make a clear distinction between two definitions so that to proceed with the research flawlessly. Whereas dismissal is a term used for employment termination on the grounds of employee’s misconduct or breaking the company’s rules and policies, redundancy is used as a result of poor business performance or diminishing its capabilities when reduction of jobs is needed in order to cut costs and increase company's stability in the market. Whatever the reason for dismissal, an adverse effect on the employee’s morale and loyalty is significant. “The ‘survivors’ may feel very vulnerable to future job cuts while the most employable may well seek other work before that happens” (Henderson, 2017, p.40). Of course, it is the HR manager’s job to reduce staff, and he/she has no choice but to proceed. However, he/she can build the right strategy for the procedure to minimize the stress and low morale caused by reorganization and job cuts. HR managers “can make an important contribution by managing the process in such a way as to minimize both the individual distress and trauma that redundancy can cause as the organizational damage can result from ill-considered or badly implemented dismissals” (Henderson, 2017, p.39). It can be done by designing redundancy policies and practices that align with legal requirements, employment contract, and relevant business policies and codes. HR managers can also consult other managers regarding further trainings for employees, increasing communication, and offering outplacement services. As Torrington, Hall, and Taylor (2008, p.225) underline, in cases of redundancy, it is inexcusable for an employer to be awkward or “whimsical” as by implementing the process, a “significant breach” must be undertaken so that an employee would not claim in court that it was unfair dismissal. Therefore, it is crucial to implement the redundancy process accurately within a legal framework to avoid wrongful dismissal.

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Developed countries have more or less similar legislation regarding unfair dismissals. For example, Employment Rights Act (1996) in the United Kingdom requires an employee to be protected from redundancy by compensation. In the United States, Equal Employment Opportunity Law (EEO) and other state laws limit manager’s actions towards redundancy. Moreover, a minimum one week notice prior to the day of dismissal should be given to the employee that was employed for a duration of up to two years, while a two weeks notice is given to the employees being in service for over two years with one additional week notice for every year worked over two years period with a maximum notice of twelve weeks. The Worker Adjustment and Retraining Notification Act requires companies with headcount over 100 employees give sixty days notice before closing a facility (Dessler, 2000, p.384). This way, the law provides enough time for laid-off people to find new jobs. However, even when the management believes it acts legally, some pitfalls may occur. For instance, an online magazine HRD America (Willow, 2014) posted a case of a Walgreen’s employee who was fired for breaking the company’s shoplifting policy by stealing a $1.39 bag of chips. Apparently, an employee broke the company’s contract and policy, and Walgreens has complete right to dismiss her. However, it turned out to be a difficult case, as the employee was protected by the American’s with Disabilities Act (ADA): since she was a diabetic, she took the bag of chips to stabilize blood sugar. Eventually, indirect discrimination may occur if redundant are part-time workers as they can be young mothers or people with disabilities who cannot work full time.

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Dessler emphasizes (2000, p. 378) that “dismissals should occur only after all reasonable steps to rehabilitate or salvage the employee have failed.” This requirement means that the management together with HR should carefully consider how they can avoid employees’ redundancy and whom to make redundant. Many companies use unwritten LIFO rule to lay off workers, according to which the most recently employed person will be the first dismissed. Until recently, this approach was the most popular among employers before they experienced skills shortages and became more often sued for non-objective and unjustified dismissal.

Therefore, to run a redundancy procedure smoothly, the management and HR should undertake the following actions. Firstly, employment contracts, codes, and policies should be reviewed on a regular basis to see what causes can be grounds for dismissal. Secondly, HR should consider what employees should be retained to avoid skill shortages, direct or indirect discrimination, and period of service in the company. It is crucial that every choice is reasonably justified and objective, having weighted all pros and cons. “A reduction of number of jobs does not necessarily mean that the jobholders will have to be redundant, although this can be the case depending on the numbers involved, on the time scale over which the job losses have to be achieved” (Banfield & Kay, 2010, p.377). Thus, the HR manager should carefully consider alternatives, such as a pay cut or pay freeze, reduction of hours of work, redeployment, early retirement, overtime reduction, or recruitment freeze. When communicating with employees about the upcoming changes, it is good to inquire whether there are volunteers who want to leave. The management can even offer rewards for voluntary redundancy. The redundancy consultation should be implemented with all the employees as soon as they receive a short notice according to the law. During the face-to-face meeting with an employee, the HR manager should have a consultation and discuss fairly why he or she is made redundant, what help the employee may need, and what alternatives can be offered. The most important for consultation meeting is to make sure this person is justifiably chosen and will not file a lawsuit. Employee Assistance Programs are popular as a service for confidential counseling paid by the employer, claiming “to provide help and assistance with any problem an employee or their family may have, from emotional, marital and stress-related problems, legal or financial problems, to alcohol and drug abuse” (Kettley, 1995, p.17). Such counseling service, also called outplacement, does not require an employer to take responsibility for a laid-off worker's future employment; its purpose is to support an employee by giving an advice and career counsel.

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In conclusion, in any case, either a worker is dismissed for the cause of misconduct or redundant for the job cut, it is always a drastic change in person’s life. Business management should carefully consider ways to reduce the stress and bad impression from being laid off so that the former employee would not feel an urgent need to turn to the court. Such factors as laws, the possibility of direct or indirect discrimination, low morale of ‘survivors’, business policies and employment contracts, and possible alternatives should be taken into consideration before proceeding with dismissal and redundancy. By terminating an employment contract, an employer’s task is to review objectively whether all other options were considered accurately and this is the only best choice for a business.