Redundancy is high on the agenda for many manufacturing companies. Mark Young explores the legalities firms need to consider when making redundancies and some effective instruments which can soften the blow to both employee and employer
After many years of becoming fitter and more competitive, the UK manufacturing
sector has been able to avoid large scale redundancies of late. But redundancies are making headlines again. Recently released figures from the Office for National Statistics show there were 78,000 redundancies in the three months to November 2008, bringing the total to 101,000 for the year to date, the highest figure since ONS employment records began in 1995. Manufacturing has borne its fair share of the job losses. Big name firms to announce large culls last month include food producer Bernard Matthews (100 staff), Corus (2500), computer maker Dell (1,900), Jaguar Land Rover (450), JCB (674), Nissan (1200), Newcastle Production – producer of Findus frozen foods (420), Tulip International – maker of Spam and Stagg Chilli (303) and porcelain maker Wedgwood Waterford (367). Between them, these companies announced redundancies of well over 7,500 employees in just over a fortnight.
While there are legal obligations to limit redundancies, and the Government also encourages companies to do so, large scale redundancies are a hard fact of life in
times of economic uncertainty. When in January Nissan announced 1200 workers at its Sunderland plant were being cut from the payroll, business secretary Lord Mandelson said: “Nissan have taken this decision today in order to secure its future success. The government stands fully behind that.”