Dismissal, retrenchment and redundancy of employees

• All employees eventually leave the employ of the organisation
• This can be due to:
  1. Separation as a result of management action:
  2. Disciplinary action
  3. Dismissal due to dissatisfaction with performance
  4. Redundancy
• It could also be due to other factors that are unavoidable such as:
  1. Death this is quite common with soldiers for example although it can happen in any occupation
  2. Retirement
  3. Ill health
  4. Pregnancy
  5. Marriage
• Voluntary or avoidable separations:
  1. Dissatisfaction with the job,pay, working conditions leading to resignation

Terms used in separation

• Downsizing –reducing the size of an organisation, especially in terms of reducing the number of people in order to make it more profitable
• Downsizing can be a result of:
• new technology that reduces the labour needs within the organisation e.g. computers replacing record keepers
• Falling demand for the product
• Poor human resources planning resulting in surplus employees
• Insolvency of the business
• Redundancy-is the elimination of jobs or job categories caused by downsizing, rightsizing, or outsourcing
• with redundancy the employee is no longer needed or their position no longer exists within the organisation
• Natural wastage-is the process of employees leaving the organisation because they want to retire or move to other jobs rather than as a result of dismissal by the employer
• Dismissal-is the termination of an employee’s employement contract in a correct, fair and lawful manner by the employer
• If dismissal is not fair it is called unfair dismissal
• Reasons for proper dismissal include:
  1. incapacity
  2. misconduct
  3. redundancy or any other substantial reaoson
• Retrenchment- is the act of laying off employees by the organisation due to a number of reasons including cost reduction

To access more topics go to the O Level Business Notes