recommend and justify which employee(s) to make redundant in a given situation

2.3.3 Why Reducing the Size of the Workforce Might Be Necessary

1. Key Reasons (Cambridge syllabus wording)

Exam tip: The syllabus asks “why” – always link the cause (e.g., “automation”) to the effect (e.g., “fewer operators needed”). A short cause‑effect sentence earns full marks.

2. Distinguishing Redundancy from Dismissal

One‑sentence summary for exam answers: “Redundancy is a business‑driven removal of a role; dismissal is a person‑driven termination for conduct or performance.”

2.3.4 Legal Controls Over Employment Issues (Cambridge wording)

When a redundancy is being considered, the following statutory controls must be observed. Each control is shown with the exact syllabus phrase and a one‑line impact statement.

• Legal controls over employment contracts – terms must be honoured; any change requires mutual agreement or proper notice. Impact: Breaching a contract can give the employee a claim for wrongful dismissal.
• Legal controls over unfair dismissal legislation – redundancy must be a genuine business reason and follow a fair procedure. Impact: Failure to follow the statutory procedure can render the dismissal unfair.
• Legal controls over discrimination law – selection criteria must not discriminate on the basis of age, sex, race, disability, religion, etc. Impact: Discriminatory criteria expose the employer to tribunal claims.
• Legal controls over health & safety regulations – the remaining workforce must still be able to work safely. Impact: Over‑working staff can breach H&S duties and attract enforcement action.
• Legal controls over minimum wage & working‑time regulations – redundancy must not be used to avoid paying statutory entitlements. Impact: Under‑paying breaches employment law and can lead to fines.
• Legal controls over redundancy payments (Redundancy Payments Act or equivalent) – eligible employees are entitled to statutory redundancy pay. Impact: Non‑payment results in a legal claim for arrears.

2.3.3 Process for Selecting Employees for Redundancy

Convert the seven‑step flow into a checklist that students can copy verbatim into an exam answer.

1. Analyse business needs – Identify which functions are essential for the future operation.
2. Identify roles at risk – Map every role against the essential functions.
3. Develop selection criteria – Use objective, non‑discriminatory criteria (performance, skills, attendance, qualifications, redeployment potential).
4. Apply criteria consistently – Score each employee, rank them and create a shortlist.
5. Consult and communicate – Explain the process, allow employees to respond, and consider voluntary redundancy.
6. Make final decisions – Document the rationale for each redundancy decision.
7. Implement support measures – Provide notice, statutory redundancy pay, out‑placement services and, where possible, training for alternative employment.

Evaluation cue (AO4): After listing the steps, briefly evaluate the fairness of the process (e.g., “The use of objective criteria and consultation promotes procedural fairness, but the process could be criticised if seniority is ignored where it is a statutory tie‑breaker.”).

2.3.3 Selection Criteria (with justification and marking rubric)

Sample marking rubric (AO2/AO3)

2.3.3 Impact on Employees and the Business

Short‑term effects

• Reduced morale and increased anxiety among remaining staff.
• Potential loss of productivity while work is re‑organised.
• Negative publicity that may affect the company’s brand.

Long‑term effects

• Lower operating costs and improved profitability if redundancies are well‑targeted.
• Opportunity to introduce new technology or processes with a leaner workforce.
• Risk of skill gaps if critical knowledge is lost; mitigated by training or redeployment.

Mitigation strategies: transparent communication, support services, and involving staff in redesigning work processes.

2.3.3 Voluntary Redundancy and Support Measures

• Offer voluntary redundancy first – reduces compulsory dismissals and demonstrates good faith.
• Statutory redundancy pay (or higher contractual payments) must be offered to eligible employees.
• Out‑placement services – CV writing, interview coaching, job‑search assistance.
• Retraining programmes – help staff qualify for other roles within or outside the organisation.
• Counselling or employee‑assistance programmes – address emotional impact.

2.3.3 Sample Scenario and Recommendation (exam‑style)

Scenario: A mid‑size manufacturing firm has experienced a 30 % drop in orders over the past year because a new competitor entered the market. The firm must cut costs by £500 000 per year. The current workforce consists of 50 employees in production, administration, sales and maintenance.

1. Analyse the cost structure – Labour costs total £800 000.
2. Identify non‑essential functions – Sales staff are still required; the production line can be streamlined.
3. Develop selection criteria – Performance (last 2 years), skill relevance to the revised production process, attendance record, potential for redeployment.
4. Apply criteria:
   • Three senior production operators: high performance, specialised skills – retain.
   • Five junior operators: lower performance, limited transferable skills – shortlist.
   • Two maintenance technicians: cross‑trained in machinery and health‑and‑safety – retain.
   • One maintenance technician: poor attendance – shortlist.
5. Consult – Offer voluntary redundancy to the shortlisted staff and provide out‑placement support.
6. Final decision – Make four employees redundant: the two junior operators with the lowest performance scores and the maintenance technician with poor attendance.

Justification: The selected employees have the lowest performance scores, limited skill relevance to the new production process and higher absenteeism. Retaining the higher‑performing, cross‑trained staff ensures the firm can maintain quality, meet the required £500 000 cost reduction and comply with legal and ethical standards.