Why Is Data Redundancy Bad?

Any good MS Access Database Developer or Consultant would know that database redundancy is a big
problem for any database, large or small. It might not be immediately obvious to laypeople as to why
exactly data redundancy is so bad, theres a bunch of reasons ranging from the obvious to the not so
obvious.
Arguably the worst part of data redundancy is the fact that the database are unnecessarily larger this
might not seem like such a problem these days with our 2TB HDD, but it was a huge problem not too
long ago when space was an important commodity. But hand in hand with larger file sizes is slower
speeds and that is still a concern for people these days, particularly clients who wouldnt be too happy
knowing that a poor database developer or consultant allowed a easily fixable problem that affects
profits get past them.
There is also the issue that the database has to be updated in more than one place; just a simple
mistake could have two different values for the same record, which could cause catastrophic failures in
the database, and depending on the use of the database could cause thousands of dollars of damage
or even worse, could put lives at risk through something easily avoided with through
planning.________________________________________________________________________________________
__

A redundancy doesn't have to be a bad thing

We all dream of winning the lotto, and many of us have already secretly spent the
fictional payout on a new car, a holiday or a new home. Others are standing in the
line behind you at the coffee shop each morning, dreaming of an entirely new life
perhaps retraining in a new field or industry, or even of opening their own business.
National statistics show us that we are far more likely to be made redundant from
our jobs than we will be successful at winning Powerball. The average Australian can
now expect to be made redundant at least once in their career sometimes more
than once and as our economy continues to move along in fits and starts, these
statistics won't be changing any time soon. Right Management's survey of 1500
Australian businesses in November last year highlighted sectors particularly under
pressure, with the proportion of employers planning above-average layoffs in 2014
including mining/resources (21 per cent); manufacturing (15 per cent); and
transport/utilities (15 per cent.)
Retrenchment and redundancy are ugly corporate words, especially for those who
have been out of work for a while or who are struggling to re-enter the workforce.
Many people who have been with one company for a considerable period of time
(12-plus years) or those who are relatively inexperienced in their field, or mature
(50 years and over) can find re-employment a real challenge, with many employers
and recruiters putting them in the "all too hard" basket.
Given all this, can there be a new way of viewing a redundancy? Rather than it
symbolising it being the end of something, could it in fact symbolise a new
beginning? Can those who are prepared to dream and plan beforehand actually use
their payout to start a new life, one they really want to live?
When asked, many people say the first thing they would do if they won the lottery
would be to quit their job. US Research house Camelot published research findings

last month on the effect that winning the lottery had on 36 US lottery winners. Of
those who won, 48 per cent stayed in the same job, while 45 per cent left to start
their own business. That's almost half who used their windfall to change their
career.
With some redundancies hitting the six figures, often including long-service
entitlement payouts and similar, it might be possible with the right mindset to
approach being retrenched in the same way you would approach holding the
winning lottery ticket. After the shock fades of not going to that same building each
day, a $50,000 or $100,000 cash injection into your life may not be that bad going.
If you work in an industry under pressure, or are in a company making murmurs
about "strategic reshaping" and "future redeployment opportunities" it won't hurt
you to take 10 minutes to daydream about what your life could look like with a
redundancy windfall. What university would you attend? What business could you
start? What country would you love to live in? Investing in some dreaming could
make a redundancy feel similar to winning the lottery. Your chances are higher, for a
start.
Claire Linton-Evans is a senior executive and author of the career bible for modern
women, Climbing the Ladder in Heels How to Succeed in the Career Game of
Snakes and Ladders.

Redundancy in United Kingdom law

From Wikipedia, the free encyclopedia

Redundancy in United Kingdom law concerns the rights of employees if they are dismissed for economic reasons
in UK labour law.

Definition of redundancy
Section 139 of the Employment Rights Act 1996 defines the two situations in which a redundancy may occur:
(a) the fact that his employer has ceased or intends to cease
(i) to carry on the business for the purposes of which the employee was employed by him, or
(ii) to carry on that business in the place where the employee was so employed, or

(b) the fact that the requirements of that business

(i) for employees to carry out work of a particular kind, or
(ii) for employees to carry out work of a particular kind in the place where the employee was employed by
the employer,
have ceased or diminished or are expected to cease or diminish.

Diminishing of work[edit]
While the first case envisages situations where an employer simply closes his business, the
second scenario has caused trouble in its interpretation.

_____________________________________________________________________________

Layoff
"Downsizing" redirects here. It is not to be confused with degrowth or shrinkage.
Layoff (in British[1] and American English), is the temporary suspension or permanent termination of employment of
an employee or (more commonly) a group of employees (collective layoff)[2] for business reasons, such as when
certain positions are no longer necessary or when a business slow-down occurs. In the UK, permanent termination
due to elimination of a position is usually called redundancy.
Laidoff workers or displaced workers refers to workers who have lost or left their jobs because their employer has
closed or moved, there was insufficient work for them to do, or their position or shift was abolished.[3][4]
Originally the term layoff referred exclusively to a temporary interruption in work, as when factory work cyclically falls
off. In late 20th and early 21st century North America, layoff usually means the permanent elimination of a position,
requiring the addition of "temporary" to specify the original meaning.
Many synonyms such as downsizing exist, most of which are euphemisms or doublespeak and more abstract
descriptions of the process, most of which can also be used for more inclusive processes than that of reducing the
number of employees. Downsizing is defined as the "conscious use of permanent personnel reductions in an attempt
to improve efficiency and/or effectiveness".[5] Since the 1980s, downsizing has become increasingly common. Indeed,
recent research on downsizing in the U.S.,[6] UK,[7] and Japan[8][9] suggests that downsizing is being regarded by
management as one of the preferred routes to turning around declining organisations, cutting costs, and improving
organisational performance,[10] most often as a cost-cutting measure.

Terminology[edit]
Euphemisms are often used to "soften the blow" in the process of firing and being fired.[11] The term "layoff" originally
meant a temporary interruption in work (and usually pay). The term became a euphemism for permanent termination
of employment and now usually means that, requiring the addition of "temporary" to refer to the original meaning.
Many other euphemisms have been coined for "(permanent) layoff", including "downsizing", "excess reduction",
"rightsizing", "delayering", "smartsizing", "redeployment", "workforce reduction", "workforce optimization",
"simplification", "force shaping", "recussion", and "reduction in force" (also called "RIF", especially in the government
employment sector).
"Mass layoff" is defined by the United States Department of Labor as 50 or more workers laid off from the same
company around the same time. "Attrition" implies that positions will be eliminated as workers quit or retire. "Early
retirement" means workers may quit now yet still remain eligible for their retirement benefits later. While "redundancy"
is a specific legal term in UK labour law. When an employer is faced with work of a particular type ceasing or
diminishing at a particular location,[12] it may be perceived[by whom?] as obfuscation. Firings imply misconduct or failure
while layoffs imply economic forces beyond the employer's and employees' control, especially in the face of a
recession such as the one that began in the late 2000s.

Common abbreviations for reduction in force[edit]

RIF - A generic reduction in force, of undetermined method. Often pronounced like the word riff rather than
spelled out. Sometimes used as a verb, as in "the employees were pretty heavily riffed".
eRIF Layoff notice by email.
IRIF - Involuntary reduction in force - The employee(s) did not voluntarily choose to leave the company. This
usually implies that the method of reduction involved either layoffs, firings, or both, but would not usually imply
resignations or retirements. If the employee is fired rather than laid off, the term "with cause" may be appended
to indicate that the separation was due to this employee's performance and/or behavior, rather than being
financially motivated.
VRIF - Voluntary reduction in force - The employee(s) did play a role in choosing to leave the company, most
likely through resignation or retirement. In some instances, a company may exert pressure on an employee to
make this choice, perhaps by implying that a layoff or termination would otherwise be imminent, or by offering an
attractive severance or early retirement package.
WFR - Work force reduction.

Unemployment compensation[edit]
The method of separation may have an effect on a former employee's ability to collect whatever form
of unemployment compensation might be available in their jurisdiction. In many U.S. states, workers who are laid off
can file an unemployment claim and receive compensation. Depending on local or state laws, workers who leave
voluntarily are generally ineligible to collect unemployment benefits, as are those who are fired for gross misconduct.
Also, lay-offs due to a firm's moving production overseas may entitle one to increased re-training benefits. Some
companies in the United States utilize Supplemental Unemployment Benefits.[13] Since they were first introduced by
organized labor and the Department of Labor in the early 1950s, and first issued in a Revenue Ruling by the IRS in
1956, SUB-Pay Plans[14] have enabled employers to supplement the receipt of state unemployment insurance benefits
for employees that experience an involuntary layoff. By establishing severance payments as SUB-Pay benefits, the
payments are not considered wages for FICA, FUTA, and SUI tax purposes, and employee FICA tax. To qualify for
SUB-Pay benefits, the participant must be eligible for state unemployment insurance benefits and the separation
benefit must be paid on a periodic basis.
Certain countries (such as Belgium, Netherlands, Portugal, Spain, Italy, France and Germany), distinguish
between leaving the company of one's own free will, in which case the person is not entitled to unemployment
benefits, but may receive a onetime payment and leaving a company as part of a reduction in labour force size, in
which case the person is entitled to them. A RIF reduces the number of positions, rather than laying off specific
people, and is usually accompanied by internal redeployment. A person might leave even if their job is not reduced,
unless the employer has strong objections. In this situation, it's more beneficial for the state to facilitate the departure
of the more professionally active people, since they are less likely to remain jobless. Often they find new jobs while
still being paid by their old companies, costing nothing to the social security system in the end.

Part XI, Redundancy payments

Section 135 of the Act gives employees a right to redundancy payments. This means when their jobs have become
obsolete and employer should compensate them, provided they have become an established employee. The
qualifying period for redundancy is having worked for two years with the same employer (s.155). You are not entitled
to redundancy if you have simply reached retiring age (s.156). And nothing prevents the employer from making a
dismissal for misconduct or capability, as outlined under the fairness provisions for dismissal (s.98).
The amount of redundancy is based on a length of service calculation and age. For each year you have worked while
you were under 21 years old, you get half a week's pay. For each year between ages 21 and 40, one week's pay. For
each year over 40, one and a half week's pay (s.162). However, there is an upper limit set on what can be considered
a week's pay, which is approximately the same as a week on the minimum wage (if you were made redundant on or
before 31 January 2011, it was 380 per week - from 1 February 2011 to 31 January 2012, it was 400 - currently it is
450, before tax[1]).

Part XII, Employer insolvency

This right, under section 182, to compensation for lost earnings is for when the employer goes broke. It applies in the
unlucky cases where an employer has gone bankrupt or insolvent and there is no money left to pay the staff, who
have outstanding pay cheques. The Secretary of State, on behalf of the government, guarantees pay up to a certain
maximum, to replace what was lost.

______________________________________________________________________________

What to do if you are offered voluntary redundancy

Is voluntary redundancy an opportunity to be paid to change direction, or a foolish leap of faith into choppy waters?

Considering voluntary redundancy? It may not be easy to find another job. Photograph: Dominic Lipinski/PA. To
those who are facing or have been through compulsory redundancy, being worried by an offer of voluntary
redundancy must seem self indulgent. Many would consider the choice of staying in the same job or receiving a large
sum of money to go away a luxury.
If such an option were offered in better economic times, when the potential for finding a new job was greater, they
would be right. But the government'sspending review forecast 490,000 job losses by 2014-15 a projection that could
rise if the Office for Budget Responsibility's November economic forecast, due next Monday, is worse than expected.
These losses will inevitably have a knock-on effect on employment in the private sector, making the idea of taking
redundancy rather less attractive.
Howard Archer, chief UK economist for IHS Global Insight, says he expects a "clear deteriorating trend" in
employment during the next two years. "Major job losses are on the way in the public sector, and we doubt the private
sector will be able to fully compensate for this. Indeed, we suspect firms will become increasingly cautious in their
employment plans," he says.
Archer thinks there are also likely to be significant job losses in private companies supplying services or goods to the
public sector.
Many firms are likely to try to meet any increase in business through making greater use of the workers they have
already or using part-time staff, and they are likely to be reluctant to take on any more permanent staff unless they
are really convinced that sustained improvement in their business is probable," he says.
Ironically, a good redundancy package can make the decision even more complicated. "I was recently offered more
than a year's salary to take voluntary redundancy," says Sarah, who works in publishing. "It was a lot of money and
could have nearly paid off my mortgage. I decided against in the end because I wasn't certain I would find other work,
but I'm still not sure I made the right decision."
Making such a choice is entirely personal, says Elaine Smith of Zest Business Coaching, which runs courses to help
people cope with change, including redundancy: there is no right or wrong answer. "What is crucial is to make sure
you ask yourself the right questions so that you are entirely confident about the decision you eventually make," she
says.
Most people fear change, especially when it is thrust upon them. So what should you do to prevent this fear pushing
you into the wrong decision?

Take a step back

"People don't give themselves time to think decisions through properly, to reflect on what is really important to
them," says Smith. People being offered voluntary redundancy should look at the physical and emotional impact of
any change in addition to the financial implications and then work out whether they can do anything positive to
mitigate that impact.
Gareth Chick, human resources specialist and director of Spring Partnerships, says: "Talk it over immediately with a
small number of people who care about you your spouse obviously, but maybe also a close friend and maybe a son
or daughter who is working, if you have one. These people will help you to think through your options. They will
sympathise with your predicament but they will also quickly move to bolster your confidence and help you turn it to
your advantage."
Stay positive
Most people think about change negatively, says Smith, but to make a clear decision, you need to understand why.
Was it, for example, imprinted on you in your childhood that it is better to be in a "secure and steady" employed
position, even if you don't enjoy that job, than work in a variety of consultancies?
Once you have identified why you are thinking in a particular way, you are better able to work out if it is a reasonable
opinion. Or are there solutions, once you allow yourself to look for them?
"We try to encourage [clients] to play 'what if' in a positive way," says Smith. "What if I get the job I've wanted for
years but have never had the courage to apply for? What if I set up my own business, and it flies? Don't just think of
the threats try to consider the opportunities.
"Sometimes they will still find negative outcomes, such as 'I'm going to have to work all the time, it will have a huge
impact on the family', 'I will be lonely and have no one to talk to', or 'I won't be able to go skiing three times a year'.
Alternatively, they can say 'I know it will be really hard for the first couple of years and the bits that are important to
me are that I should take time out/find someone to bounce ideas off/develop a support network.'"
Chick agrees: "I know it sounds crass, but stay positive so many people who endure the shock and trauma of
redundancy go on to experience it as the best thing that ever happened to them, so make sure you are thinking as
clearly as possible before deciding."
Understand what you are being offered
Employers offering voluntary redundancy want to achieve a certain headcount loss so they do not have to resort to
forced redundancies. They may, therefore, be willing to offer more than they first put on the table.
Play up any and every positive aspect of your employment record, such as attendance records, past employee
recognition or really positive appraisals. Since you have shown dedication and loyalty, the least they can do is match
this now. Ask for additional periods of notice, or maybe outplacement support to put you in a strong position for
finding new work.
Chick suggests using a third party to do the negotiation for you. However, whether you or a representative are
handling negotiations, he adds: "Treat the people who are communicating the decision to you with respect. The more
you make their life easy, the more you will get out of them."
Your union representative, if you belong to one, might be able to offer legal help for checking the compromise
agreement (the terms that you agree to on leaving).

Try to think long-term

Consider what else you could do, even if you end up turning down the chance to leave, says Chick. "Really understand
your financial situation and how long the redundancy pay would last you before you gained employment again, or
indeed what new lower salary you could survive on if you could find something to work or train in that you really
love."
If a course of action seems frightening, consider what you could do to eliminate the elements that worry you. For
example, if you are considering going freelance and the type of job you do lends itself to working on a freelance
basis changes to the way you would have to work could put you off.
"If you have previously been employed in an office, you are probably used to having social contact and a support
network," says Smith. "Self-employment might seem challenging because it's outside those networks. But could you
replicate that social contact elsewhere in self employment?"
Someone in this position could share an office, set up in business with a partner, ensure that at least part of the day is
spent out meeting clients or working in their premises, or join trade associations that enable them to network and
keep up with the gossip in their industry.
The options to consider may not just be work-related. Rob, a company manager and main earner for his family, was
offered more than 80,000 in voluntary redundancy more than enough to keep his household going provided they
moved out of London. His work was highly pressurised and he was inclined to take up the offer but for his daughter
who attended a highly academic school in London.
He felt that his daughter's future could well be affected by changing schools but if they couldn't move from London,
he could not afford to give up his job. However, Rob now admits that he didn't thoroughly research whether there
were schools in the area to which his family wanted to move, that could replicate the academic performance of his
daughter's current school. Smith comments: "If you have been doing a particular thing for a long time, it becomes
difficult to see that there might be another way to do that, be it the school your children go to, the neighbours you live
next door to, or the way you earn your living."
Are you better off staying put?:
When a workplace starts making redundancies, the change effects everyone, including those left behind. "Survivors"
will inevitably miss some of their colleagues, and perhaps have to work harder or do longer hours without extra
remuneration or recognition as a result.
Chick says: "Read up about the company's prospects or even take some advice if this round of voluntary
redundancies is just a precursor to a later round of forced cuts, then the package on offer now might be as good as it
gets. Many people turn down generous packages only to find themselves forced to take lower sums later on."

Why Redundancy Is Not a Dirty Word :Theres a lot of it going around.

Maybe its happened to you. So youve been made redundant and you are worried
about how to explain that to friends and business contacts, and especially to recruiters
and potential employers. After all, who wants to hire someone who is redundant, right?

Reality Check #1 No-one can make you redundant.

This may sound like a rather fine point, but in reality no organisation can
make you redundant. Think about it for a moment. Between the day before the
redundancy and the day after, what has changed to lessen your skills, acquired
experience, intelligence, knowledge and behavioural strengths? Not one thing! Yes it is
possible that your skills and knowledge may be getting out of date if you have not
kept up with developments in your field, but most of the value you have to offer is still
intact, irrespective of the redundancy.
They can take your job away but they cant change you.

Reality Check #2 Why did you leave?

A fair question, which you will run into frequently. You will have to have a confident,
positive answer to explain why you have you left or want to leave your last or current
employer.
To reassure you a little, while there may still be some people around who take a less
than positive view of a job applicant who is facing redundancy, most people recognise
that most redundancies these days have nothing to do with your capability or
performance. Not only that, but most people you meet during your job search will
either have experienced redundancy themselves at least once or they will know
people who have. What matters is how you handle it when the question comes.
It can help to put together a brief statement ahead of time so that you are not
fumbling around for words when asked. Many coaches and outplacement organisations
would suggest you try to avoid using the word redundancy or if you cant avoid it
altogether, connect it to the job not to yourself.
Check out these examples and consider which you would rather hear if you were a
hiring manager:

Example 1
Interviewer:

So, why did you leave Company A?

Candidate:
I got made redundant. I guess you could say I was a casualty of the
latest cost cuts. (As a recruiter I have actually heard people say this sort of thing!)
Who wants to hire a person who thinks and acts like a victim when things get tough?

Example 2
Interviewer:

So, why did you leave Company A?

Candidate:
The Company had been under pressure for some time and there was
a real focus on costs. As part of this, several roles were made redundant and mine was
one of those affected. I see this as an good opportunity to move ahead into a new and
challenging role.
This sounds like a person who has some resilience, a positive outlook and the will to
grasp a challenge and make the best of it. Much more attractive to most employers.

Pros of taking redundancy/arguments against sticking around

Most people will change jobs several times in their careers. Taking redundancy lets you do so and gives you a small-ish
nest egg, meaning you wont necessarily have to take the first job on offer when you start looking.

If your business or sector is in trouble, taking redundancy will usually work out better financially than being stuck in a
company that goes broke,

If your department is being reduced in size, everyone who does stay is likely to be worked much harder. Taking
redundancy could make sense if youre already feeling stressed.

Cons of taking redundancy/arguments for sticking around

If a large department is being reduced, there will be significant competition for similar jobs in other fields, which means
scoring a job at the salary you want where you already live will be more challenging.

If the business retains you, it clearly values your skills and is potentially more likely to promote you.

The older you are, the more difficult it may be to score an alternative permanent job.

You can still seek alternative jobs while sticking in your current post.

When balancing these issues, you need to honestly assess your own value to the business. Do you perform a similar role to
numerous other employees? Do you work well with your colleagues? What job did you see yourself performing three years from
now? Those factors will also influence your choice.
Wed love to hear additional comments and suggestions from readers, especially those who have found themselves in this situation.
Good luck! Cheers

Strategies and Options

RETIREMENT AND REDUNDANCY
If soft options or workplace restructuring options are not enough, voluntary departures, compulsory redundancy, or both may be
needed. Given high levels of overstaffing, most PPI schemes will need to turn to these options.
Voluntary departure arrangements are the most widely used mechanism for reducing the size of the work force and arguably are the
most politically and socially acceptable largely because of their voluntary nature. A voluntary departure program invites workers to
vacate their posts in exchange for a certain compensation package. The compensation may be a cash payment alone or it could be
in the form of enhanced pension rights, shares in the new private enterprise, or other emoluments, plus a cash payment. The
amount of compensation should act as an inducement to voluntary behavior and therefore is typically more generous than a
statutory settlement payable under any national labor laws. Other benefits may also be included in the voluntary departure package
(for example, retained rights to medical or housing benefits).
Voluntary programs often include an early retirement component. In such a program, workers cease work before the normal
retirement age and receive a partial or full pension (see module 5 for more). Early retirement is usually a voluntary option, but it can
be compulsory if the retirement age is reduced for all workers
Voluntary redundancy is the most widely used mechanism for reducing work force numbers in infrastructure companies.

Most implementing agencies have used voluntary rather than compulsory departure as the core of their labor restructuring program
(see, for example, the cases of Bolivia rail, Mexico railways, Orissa power distribution, and Brazil railways on the Toolkit CD-ROM).
There are many reasons for this:
There are some compelling reasons for voluntary rather than compulsory redundancy.

Political benefits: It is usually better for government if redundancies can be limited to voluntary redundancies because it
demonstrates that there has been limited coercion of the work force (see box 4.8).
Fairness: A voluntary departure package is an indicator that government is treating workers fairly, which will in turn help
smooth subsequent labor programs and SOE reforms.
Speed: Voluntary departure programs, almost by definition, provide a better severance package than the minimum
statutory benefit. Where compulsory redundancy is politically difficult, the enhanced benefit is an incentive for workers to
leave relatively quickly and in larger numbers.
Control of rehiring: Governments and donors alike are wary of creating a "revolving- door" situation where they finance
the costs of severance for workers but then rehire those same workers. One problem with compulsory retrenchment
through statutory procedures is that government may be legally unable to prohibit the rehiring of workers. In contrast,
the voluntary departure offer is usually a bilateral contract between employer (government) and employee, and so
enables government to include clauses prohibiting the employee from working again for government or the post-PPI
enterprise.
Getting around restrictive legislation: Compulsory redundancy procedures may be determined by legislation, with
statutory procedures, or within collective bargaining agreements or labor contracts. Governments may want to use
voluntary departure to avoid compulsory redundancy procedures if those procedures set out mandatory and extended
timetables for implementing compulsory redundancy or provide for courtbased challengesall of which could delay labor
adjustment by several months, or if they require particular selection processes (for example, a last-in/first-out selection
process might be mandated, even though the staff audit might show a need to retain younger workers with different
skills).

In a few cases compulsory redundancy may be the only route or may be a government policy decision.

Box 4.8: ArgentinaThe Success of a Voluntary Approach

"In November of 1990, Argentina began restructuring its Public Administration and Public Enterprises. Voluntary exit programs were
implemented to downsize companies. In 1991 and 1992 there were 28,300 and 56,000 retirements respectively. These programs
cost $1 billion financed out of treasury funds, loans from the World Bank and the Inter-American Development Bank, and from the
proceeds of the privatization... Such a massive program of state employment reduction has not been without opposition. The
weakness and infrequency of this opposition, however, is remarkable. And while clearly many factors have contributed to this...the
absence of opposition to the state employment reduction was clearly also due to its purely voluntary nature" (Robbins 1996, pp. 6,
7).
For all these reasons, voluntary departure programs generally have been adopted to ensure a smoother, faster process of work
force restructuring with less risk of confrontation with unions or workers.
Compulsory redundancy may be the selected route when:
The enterprise is liquidated. This has been the case with a number of airlines, including Aeromexico (box 4.9).
Governments make a policy decision to pay only the statutory minimum, either because of acute financial difficulties or an
in-principle objection to "privileged" SOE employees receiving further benefits from government.
Certain geographic or functional units are closed.
Compulsory redundancy follows offers of voluntary departure, and insufficient workers have volunteered.
Box 4.9: AeromexicoLiquidation and Labor Adjustment

One of two Mexican state-owned airlines, Aeromexico (Aeronaves de Mexico), had only 3 profitable years over the 30 years prior to
its privatization, and the government had thought that it would be unable to sell the money-loser. But when 7,250 of the airlines
ground workers went out on strike in early 1988, the government seized the opportunity to exit. It declared the company bankrupt,
terminated all labor contracts, and sold the company as an asset sale. Compensation to workers was paid by Aeronaves, and it was
the creditors of Aeronaves who effectively bore the cost of severance because on average they received only about 70 percent of
their claims against the company. Tandon (1995) has suggested that some of the better post-privatization performance of
Aeromexico compared with that of the other state-owned airline (Mexicana) arose from labor adjustment issuesspecifically:

Mexicana had been unable to match Aeromexico's aggressive campaign to improve service quality (which some
observers felt reflected Mexicana's inability to deal with the unreformed labor unions).

The investors in Mexicana had needed to fund severance costs themselvesover 100 billion (old) pesos in 1992 alone.

Compulsory redundancy is best achieved through clear objectives, open communication, and transparent and fair processes. The
amount of statutory payment will be determined by labor laws or labor contracts. Early retirement, voluntary departure, and
compulsory redundancy each have their advantages and disadvantages for the implementing agency, as summarized in table
The damaging effects of redundancies Working people have paid a heavy toll throughout the economic crisis, through the high level of
redundancies, rising unemployment, particularly among young and women workers, and pressure on household incomes and living standards. By
January 2010, more than 1.3 million people had lost their job since the start of the downturn1 1 . Redundancies continue to be announced at a rate
of 164,000 per quarter. Although this figure is lower than the 300,000 at the height of the last recession (Spring 2009), in the meantime
unemployment has http://www.cipd.co.uk/pressoffice/_articles/GDPworkaudit250110.htm Introduction Trades Union Congress Collective
Redundancy Consultation 6 risen to more than 2.6 million or 8.4 per cent, meaning that those being made redundant face very difficult labour
market conditions in which to find new employment. The CIPD research also revealed that two thirds of those who succeeded in finding
employment were paid significantly less in their new job. The average pay penalty was 28 per cent.2 The recent Good Work Commission
concluded, the experience of redundancy can have damaging impact on individuals who are made redundant: Textbooks on redundancy tell us
that, technically, it is posts that are made redundant; not people. The theory is that if an organisation needs to reduce its labour costs and therefore
the number of posts it has, the people in these posts have to move on, but no blame should attach to them; they shouldnt feel bad about it or any
less of a person as a result. In practice, of course, that is not how it is experienced. For the employee, the dominant feeling is often a combination
of anger, rejection and emptiness.3 Redundancies also have a serious impact on those who remain within workplaces. Findings from a CIPD
survey in 2009 revealed that seven out of ten of employees whose organisations have made redundancies report that job cuts have damaged
morale, with more than a fifth (22%) of employees so unhappy as a result of how redundancies are being handled that they are looking to change
jobs as soon as the labour market improves. 4 A TUC survey of union workplace reps conducted with the Labour Research Department (LRD) in
2010 also revealed that the absence of effective consultation between employers and unions could have a significant impact on staff morale and
employment relations. We were able to collect responses in more than 80 workplaces with experience of recent or proposed redundancies. In half
of these cases, union reps reported that staff morale and relations with management had clearly been damaged by the experience. There are also
strong links between job security and stress levels, with employers that are planning redundancies most likely to see a rise in mental health
problems among staff. According to CIPD research, worries about job losses have helped stress become the most common cause of long-term
sick leave in Britain, 5 2 Ibid overtaking other reasons for long-term absence such as repetitive strain injury and medical conditions such as
cancer. Such problems appear particularly acute in the shrinking public sector with half of employers reporting an increase in stress-related
absence over the past y
Table 4.3: Advantages and Disadvantages of Early Retirement, Voluntary Departure, and Compulsory Redundancy
Early retirement

Voluntary departure

Compulsory redundancy

Advantages
Reduces immediate costs,
particularly if pensions are deferred
May be the most acceptable
option for workers or unions,
particularly if the pension scheme is a
defined-benefit plan
Shifts financing problems to
pension fund or future governments
(an "advantage" for today's
government, but one that creates a
long-term fiscal liability)

Advantages

Advantages

Makes a clean break with

employeesno continuing government
commitments

Makes a clean break with

employees no continuing government
commitments

Can be structured as a onetime

payment with predictable financial costs (and
usually a quick payback)

Can be structured as a onetime payment with predictable financial

costs (and usually a quick payback)

Is relatively simple to negotiate and

implement

Is likely to be the lowest-cost

option if the statutory minimum
payment is made to workers

Gives the implementing agency and

government flexibility in designing the
package
Is a bilateral contract with
employees that often avoids both the
legislative procedures and collective
bargaining agreement relating to compulsory
redundancy

Produces few adverse

selection problems; workers will be
selected for compulsory redundancy

Is politically acceptable because it is

voluntary
Permits the government to require
that anyone selecting voluntary departure
agrees not to work again for the public
sector, or for the PPI enterprise, and so
reduces the "revolving door" problem.
Disadvantages
Produces uncertain
longerterm financial costs for
government because returns from
government pension funds are
uncertain
May lead to loss of the most
skilled or experienced workers if early
retirement lowers the retirement age
Pension funds may be
unwilling or unable to provide early
retirement benefits quickly because of
problems of administrative capacity or
lack of liquidity
A substantial increase in
pensioners might tip the pension plan
into a financially unsustainable
position
Government's options may
be limited by the terms of pension
fund rules.
May need negotiation with
pension fund trustees or the
supervisory board, and so there is
potential for delay in the PPI
transaction

Disadvantages
Has high immediate costs,
especially because these plans tend to be
generous
Demands that particular care be
given to the selection process; generous
plans can lead to a rapid exodus of the best
workers

Disadvantages
Is the most politically difficult
to implement
Needs a formal and strictly
implemented process if it is to be seen
as a fair and unbiased process
May have to comply with any
collective bargaining agreements with
trade unions on which processes to
follow in the case of compulsory
redundancy
Consultation and negotiation
process can lead to long delays
Legislation may prevent the
implementing agency from imposing a
no-rehiring clause on compulsory
retrenched workers, thereby opening a
"revolving door"

Redundancy - Voluntary
What is it?

Generally, this refers to a financial incentive offered by an organisation to encourage employees to voluntarily resign, usually
to avoid involuntary redundancies.

Is it considered a termination by an employee or an employer?

Voluntary redundancy is generally viewed by

the courts and tribunals as a termination by an employer, therefore, other entitlements may still be payable in addition to redundancy pay,
such as long service leave and annual leave loading. Projections as to the true cost of voluntary redundancies should take these factors into
account.

What are some advantages of offering an employee voluntary redundancy?

One advantage is that

affected employees can opt for redundancy and consider it their own decision rather than undergoing the trauma of having an unexpected
redundancy imposed upon them. An employee would feel they have a level of control over their departure from the company. If an employer
controls the process properly it can also be an opportunity to manage out those employees who are less productive without breaching unfair
dismissal laws. This would mean taking considerable care to be as specific as possible in relation to the positions that are disappearing.

What are some disadvantages to offering voluntary redundancy?

While relieving an employer of a difficult

decision, voluntary redundancies can result in the loss of valuable staff, particularly if a redundancy benefit offered is greater than the
prescribed minimum. If applied across-the-board to the workforce, the employer may have employees leaving from different sections who
may be essential to the order and good running of the business. Again this means an employer should specify the extent of the voluntary
redundancies as precisely as possible.
An employer can control the problem by ensuring an offer of voluntary redundancy is subject to its approval (i.e. the approval
of the employer).

Redundancy
Redundancy is when you dismiss an employee because you no longer:

carry out the business for which they are employed

carry out the business in the place where they are employed

require them to carry out work of a particular kind

For a redundancy to be genuine, you must demonstrate that the employee's job will no longer exist.
Redundancy Selection - Non Compulsory
Non-compulsory redundancy covers voluntary redundancy and early retirement.
Voluntary Redundancy
You could ask employees if they would like to volunteer for redundancy and then select those to be made
redundant.
The advantages:
It is less demoralising and disruptive than compulsory redundancy and helps identify employees who are willing to
accept redundancy.
The disadvantages:
It could work out to be more expensive - you may need to offer enhanced redundancy payments to attract people
to leave.
There is also the risk that employees not granted their voluntary redundancy request may react negatively, and
you could also end up with an imbalance of skills and experience.
Early Retirement

You can offer incentives to employees to retire early.

Giving incentives for early retirement is often an acceptable alternative to redundancy for employees and trade
unions and may be less harmful to employee morale than compulsory redundancy.
Redundancy Selection - Compulsory
If you decide to make compulsory redundancies you will need to:

create an objective and non-discriminatory redundancy selection criteria

identify which employees will be made redundant

The criteria that can be used to select employees for redundancy can include:

skills, qualifications and aptitude

standard of work performance

adaptability

attendance/disciplinary record

Be consistent with your selection criteria to avoid the possibility of unlawful discrimination.
Automatically Unfair Selection Criteria
Some criteria will make any subsequent redundancy dismissal automatically unfair. You should not select an
employee for redundancy because of issues related to:

trade union membership

legal industrial action lasting up to 12 weeks

being an employee representative

actions taken on specified health and safety grounds

pregnancy, maternity, paternity, adoption and parental leave

regulations on part-time workers

Rights of Redundant Employees

Redundant employees have a number of rights and are entitled to receive a statutory redundancy payment (SRP).
The Right to Receive a Statutory Redundancy Payment
To receive a statutory redundancy payment, an individual must:

be an employee working under a contract of employment

have at least two years' continuous service

have been dismissed, laid off or put on short-term working- those who opted for early retirement do not
qualify

A redundant employee also has the right to receive a written statement setting out the amount of any redundancy
payment and how you worked it out.
You must make the payment when or soon after you dismiss the employee.
How is a SRP Calculated?
A statutory redundancy payment, is based on an employee's age and length of employment and is counted back
from the date of dismissal. Employees receive:

1.5 weeks' pay for a year of employment after their 41st birthday

one week's pay for a year of employment after their 22nd birthday

half a week's pay for a year of employment up to their 22nd birthday

Their length of service is capped at 20 years. Weekly pay is subject to the statutory limit which is 430. The
maximum statutory redundancy payment, payable is 12,900.
Taxation of SRPs
Statutory redundancy payment is not taxable, as it's not more than 30,000. Any redundancy payment you make
in addition to SRP is subject to tax and National Insurance (NI).
Other termination payments made to the employee at the same time - like a payment in lieu of holiday - must
have tax and NI deducted.
Failure to make a SRP
If an employee disagrees with the amount, or you fail to pay SRP, the employee has six months from the date their
employment ended to make a claim for payment to an employment tribunal.
If they fail to make the claim in time, a tribunal still has the power for a further six months to decide whether or
not the employee should receive a statutory redundancy payment .
If you cannot pay, the employee can apply to the Department for Business, Innovation & Skills for a direct payment
from the NI Fund.
However, they must have applied in writing to you for a payment within six months of their employment ending, or
applied successfully to an employment tribunal within the six months after that.
Other Redundancy Rights
Employees under notice of redundancy also have the right to:

be offered suitable alternative employment

have a trial period in the alternative employment without losing their right to an SRP

reasonable time off to look for a job or to arrange training

not be unfairly selected for redundancy

Potential problems following redundancy

An employee can claim unfair dismissal if they feel you:

have unfairly selected them for redundancy or incorrectly applied the selection criteria

failed to offer suitable alternative work where it was available

didn't follow the proper consultation process

Employees may also be able to claim a protective award if you fail to properly consult with their representatives, ie
trade union or elected employee representatives in collective redundancy situations.
The Department for Business, Innovation & Skill (BIS) may prosecute you for failure to notify the proposed
redundancies in advance.
Failure to Properly Consult
If you fail to properly carry out collective redundancy consultation, a complaint may be made to an employment
tribunal by:

a trade union or elected employee representatives

individual employees who have been dismissed as redundant

The tribunal may award up to 90 days' pay to each affected employee.

BIS may also prosecute you for failure to notify the proposed redundancies in advance.
Financial Problems
If your business would become insolvent as a result of making the statutory redundancy payments, the Insolvency
Service's Redundancy Payments Office (RPO) may be able to help, but you will be expected to repay the debt as
quickly as possible. They can also help if you become formally insolvent and fail to pay the employer's contributions
into an occupational or personal pension scheme or owe pay in arrears.

The Upside of Redundancy

If youve recently been made redundant, youre probably experiencing the full gamut of emotions - everything from anger and depression to relief and
hope. Research reveals following an initial shock, people eventually acknowledge substantial upsides to redundancy. It was the best thing that ever
happened to me, is a common reaction to someone who survived a redundancy.
If youre looking for the silver lining on the redundancy cloud, this article will help you see the positives of your cashed-up and temporary
unemployment.

Unexpected Money

In Australia, severance payouts are generally equivalent to two-to-three weeks pay per year of service at the company. Your payout may also include
unused annual leave. If youve been a long-term employee, this severance amount can be a substantial financial windfall.
It is best to spend as little of your payout as possible until you begin earning new income. Whether you find a new job, or start a new business, you will
need money to fund your lifestyle in the meantime.
If youre lucky enough to receive an especially large sum of money, give careful consideration to how you spend it. Dont be tempted to buy on impulse.
Instead, place the payout into a high interest savings account until you have decided how to use the money. Make wise decisions now to reap the
financial benefits of your redundancy for years to come.

Time to Refocus
For many people, redundancy is like a forced holiday. In fact, it may be the first time in years youve taken a break from work. Depending on the size of
your payout, you should have at least enough money to maintain your current lifestyle for a few weeks. Careful budgeting and cutting down on
unnecessary expenditure will extend your available time.
Embrace your newfound, albeit temporary, freedom with purpose. Use the time wisely to refocus and reassess your life goals. Depending on your
goals, your payout and your available time, you may decide to pursue a career change. Consider the opportunities below.

New Opportunities
Ask yourself how youd like to change your work life. Would you like to work fewer hours, change your career, earn more money or seek a promotion?
Redundancy is the perfect time to improve your circumstance. If youre ready for a change, give some thought to the following ideas.

Career Change Career guidance professionals can help you identify your personal strengths and workplace skills. Youll soon discover
you have many transferable skills suited to a variety of industries. Redundancy is the perfect time to embark on an exciting career in a totally new
industry.

Become Your Own Boss Perhaps youve always wanted to be your own boss. With time on your hands and cash to invest, redundancy
gives you the chance to start your own business. You can start small by accepting work as a contractor or freelancer. Remember to honour any noncompete clause you may have signed in your employment contract. After that, make the most of your career contacts and loyal followers to build
your new business.

Re-skill, Re-Train Employers often provides financial support for re-training as part of the severance package. Alternatively, you can fund
training courses with your redundancy payout. Think about upgrading your skills, or re-training in an entirely new field of expertise. Check out our
section on Up-Skilling, Retraining and Personal Development for more information on how to accomplish this.

Total Life Change No longer tied to a job, redundancy not only offers you a chance to change employers, it gives you the opportunity to
relocate. If youve been thinking of moving interstate or living overseas, redundancy provides the perfect opportunity to do so.

Redundancy Bad Effects (Employees)

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Can cause mental diseases high blood pressure, depression and heart diseases
It affects the morale of the employees
Affects perception of job security
Loss of Energy
Loss of commitment
Financial Insecurity
No or less interest in job
Loss of personal sense of worth
Uncertain about that may get alternative job or not

10- Bad effect on Resume

11- Work burden on remaining employees
12- Fear of ones own job security maybe he/she is next
At this point you know what is coming but this may not be a bad thing. You not only get your clean
ending but also a compensation package. If you can see whats coming, start thinking of the
advantages youll have in managing the gap redundancy leaves. Keep your radar turned on and your
head above the parapet. Even if they did see it coming, most people find it really difficult to manage
their point of closure. This issue of having a clear ending and effectively managing yourself into a new
beginning is quite fundamental. So when the clean ending comes, whats the best way to deal with
redundancy and prepare to move on?
Take a break if you like. Enter a different environment and this can be a trigger for moving you into a
more positive mental space.
Dont hang about. As important as details such as your compensation package are, time is the most
valuable thing here. You want to inject pace into the transition and accelerate into the neutral zone.
Once youre back from your break, get back into the game as soon as possible.
Tap into the emotional support of others. Spend time with your family, close friends and other loved
ones. Create a strong support network.
Use time effectively. Be clear about what it is youre going to do and how youre going to spend your
time.
Use this experience positively. Take time out to deal with your negativism if you need to. You have to
move yourself into a positive space and see that this is about opportunities opening up for you. You
cant afford to crumble. It is easier said than done in the reality of every day life but it must be done. If
you carry on with a negative attitude you cant move on to thinking about your next step and where
you want to be going.
Get your story straight about whats happened to you and why so you can tell it at job interviews,
networking events etc. without breaking down or appearing bitter. o Be honest but also quite
economical. You dont want to be going into a lot of detail thats irrelevant or giving too much away. o
Build an accurate story by looking at it from the organizations point view. Identify the reasons why the
company had to let people go. O Remember youre not the only person whos ever had to discuss their
redundancy. o Show really good intent in the conversation. Play up your credentials and qualifications.
Never ever bad mouth the company that youve left. This is pertinent advice for any time in your
career but particularly around the time of redundancy. Anyone looking at you as a potential employee
wont be impressed. Youll come over in a bad light, as exactly the type of individual they dont want to
hire.
Open your mind to possibilities. Youll find opportunities staring you in the face once you start asking
whats possible, what you can do and what you need to spring forward. Engage with a fresh mind to
bounce ideas off the wall with by talking to a professional career guide with real work experience