Law for Business Managers - Assignment

Law for Business
Managers

Table of Contents
INTRODUCTION...........................................................................................................................1
1. Identification of legal issues....................................................................................................1
2. Factual description..................................................................................................................2
3. Analysis of legal principles.....................................................................................................3
4. Critical assessment of law and its implementation.................................................................5
5. Discussion and proposition of legal issues..............................................................................7
CONCLUSION................................................................................................................................8
REFERENCES................................................................................................................................9

INTRODUCTION
Redundancy can be determined as a situation in which the company dismisses its
employees because of various reasons such as need of worker has been ceased, introduction of
new systems in the workplace, the job no longer exists, business is shifted to other location, it is
closed or is closing down, it is being transferred to another employer or business is facing
financial difficulties (Dief and Font, 2010). In this report, a redundancy package will be
proposed for a management consultancy company which is in financial credit crunch. The
company is considering various cost cutting measures for which redundancy would be provided
to employees. The report focuses on the identification of legal issues and assessment of current
state of law and its implementation.
1. Identification of legal issues
Redundancies are a form of dismissal of employee where his job no longer exists. In such
case, employees have certain rights such as notice period, redundancy pay, time off to look for
new job and consultation with the employer (Badaracco Jr, 2013). According to Section 139
Employment Relations Act 1996, redundancies may be compulsory or voluntary and it occurs
when :
 Employees' work is no longer required as business is down turned or due to introduction
of new systems or processes in the workplace.
 The business is closed or is closing down as it has ceased trading or became insolvent.
 The business or employees' work is moved to different locations.
 It is transferred to another employer.
All the employees under redundancy notice possess the right for getting reasonable time off to
find out new job or for arranging training and they cannot be selected unfairly for redundancy.
They may be entitled to redundancy pay by the company.
In the given case, a management consultancy firm is facing financial difficulties due to
financial credit crunch that occurred recently. So, it is seeking several alternatives to cut its costs.
For this purpose, it is considering to propose redundancy to about 56 employees of the company.
In this context, it is required to comply with the provisions of Redundancy Law before
implementing it in the organisation. It is imperative that the cited firm provides notice of
redundancy to the concerned employees so that they are aware in advance that they will be made
redundant (Stewart and Hitt, 2012). Also, the company may explain reasons for such step to the
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employees and try to search for the alternative employment within the organisation that is
suitable for the employees who have been made redundant. And if it is not possible to do so,
then, reasonable time off should be given to them, so that, they are able to look for another jobs
or make arrangements for training. Another important thing that should be taken into account by
the cited organisation is that it would be required to compensate employees by way of
redundancy pay. But, as the company is in financial crisis, it has to arrange for the amount to be
paid to so many employees under redundancy pay (Chrisman, Chan and Liano, 2010). Moreover,
it should not select employees for redundancy on unfair or biased grounds.
2. Factual description
In the present scenario, a management consultancy company is in financial trouble due to
a recent crisis in credit. To deal with this situation, it is seeking various alternative measures for
cost cutting. The cited firm is considering to propose a redundancy program in the organisation
whereby it intends to make approximately 56 employees redundant from the job.
Redundancy can be determined as a situation where the employees are dismissed from
the workplace when their job is no longer required in the organisation. It is a complex process
and encompasses various issues as many employees are involved in it. In the given situation,
company is seeking for redundancies so that it can overcome the financial difficulties, it is facing
presently (Carroll and Shabana, 2010). The cited firm is required to abide the regulations
provided by the Redundancy Law so that this process can be carried out smoothly and the
purpose for which it is carried out can be accomplished.
Before the company implements the redundancy program, it should ensure that whether
there are any other possible alternatives available to overcome this situation and avoid
redundancies. The cited organisation can take various steps for this purpose, which are
mentioned below :
 Convincing employees to seek for early retirement or voluntary redundancy.
 Seeking applications from the existing employees to work with flexibility.
 The cited firm can lay – off self employed contractors.
 There should be restrictions on recruitment.
 The company can try that casual labour is not used.
 Working overtime should be reduced or banned.
 It can provide for short time working periods or lay off on temporary basis.
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