This factsheet was last updated in March 201s.
What is redundancy?
A genuine redundancy arises only when either there has been or there is going to be:
- a cessation of business
- a cessation of business at the employee’s site
- a reduction or cessation of work.
Predictions that the number of redundancies in the UK would rise sharply during the credit crunch (particularly in finance and the construction sectors) have been substantiated by the figures from the Office for National Statistics. Figures published in our Work Audit: Counting the cost of the jobs recession reveal that by the end of 2011 there were 460,000 fewer people in work than at the pre-recession peak in spring 2008; in the same period unemployment increased by more than 1 million.
Redundancy is one of the most traumatic events an employee may experience. Announcement of redundancies will invariably have an adverse impact on morale, motivation and productivity. The negative effects can be reduced by sensitive handling of redundant employees and those remaining.