Labour Flexibility and the Legal Requirements for Redundancy Dismissals

Abstract

New-right economists and many employers argue that an efficient labour market requires that an employer should face few constraints on the right to dismiss workers as such constraints limit the employer's flexibility to adapt to changes in the marketplace and may inhibit the employer in hiring new labour. Others argue that an employee is entitled to be treated fairly whenever their security of employment is in jeopardy. The latter perspective is the one that has received legal endorsement by both the Employment Court and the Court of Appeal. This paper will examine the way in which the Courts have applied this principle in situations where a worker has been dismissed because of redundancy. It will discuss legal developments in the area and comment on the extent to which the legal requirements may inhibit an employer's decision making relating to reductions in its labour force.