Complex law governs rules of redundancy.

IN these troubled times, redundancies are on the increase, and businesses are not helped by the complexity of the law governing the conduct of a fair redundancy dismissal.

The rules are scattered around statutes, statutory instruments and decided cases, and any employer who makes a mistake risks a finding of unfair dismissal or discrimination. In this article, we mention some of the potential traps which could catch out the unwary employer.

One of the employer's first tasks is to consider the pool of employees at risk of redundancy. Our message to employers is - make sure that the "at risk" pool is not too narrow, otherwise dismissed employees may claim unfair dismissal on the ground of unfair selection. For example, remember that for redundancy purposes, associated companies are treated in law as the same business as the company effecting the redundancies.

The next potential trap for employers is drawing up selection criteria and scoring each employee, to help decide which employees are to be made redundant.

Commonly used criteria include attendance records, but what if the employee has had sick leave because of a disability or a pregnancy-related illness? Dismissal on these grounds can be disability or sex discrimination.

Employers would be wise to discount any absences for either of these reasons.

Another risk area is the once common "Last In, First Out" factor - "LIFO".

As employees with shorter service are likely to be younger, LIFO will generally infringe the law against age discrimination.

Special care is also needed if an employee is on maternity leave. She should not be left out of the "at risk" group. However if selected for redundancy, she must be offered any suitable alternative vacancy, even if there are other, better qualified candidates. Failure to offer her the job amounts to automatic unfair dismissal.

Additional penalties can also be imposed for failing to properly consult with employees. Further, if 20 or more employees are to be made redundant within 90 days, special rules on consultation apply.

We have run out of space to talk about "bumping", or age discrimination in some contractual redundancy payment schemes, to say nothing of criminal offences for failing to provide the correct written information about statutory payments.

The best advice we can give is to seek advice early. Minimising your risk can surely only be a good thing in today's difficult climate.

Sheila Watson, partner, Employment Group. [e-mail]