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Meaning & Definition


Redundancy refers to a process of terminating employees from their employment due to different business reasons. Most often the reasons are related to poor economic conditions: the job category becoming unnecessary or severely diminished, lack of projects or funds, relocation of business, discontinuance of business in general.

Redundancies can be forced or voluntary. If voluntary employees take the option when offered to them. If forced then the company has to select who is to be made redundant most often through the technique known as Last in, first out.

Redundancies are generally preceded by consultations in which the employers, employees and stakeholders collaborate on finding a way for a business to save the role from redundancy through new opportunities or restructuring.

The redundant employees can claim for a compensation for the dismissal of their employment under strict time limits.

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