"LAYOFFS WERE upon us. They had been rumoured for months, but now it was official. If you were lucky, you could sue."

Irish employers would do well to heed these ominous words from Joshua Ferris's novel Then We Came to the End. With businesses coming under increased pressure to cut costs, redundancies are unfortunately becoming a common occurrence.

And unless employers tread with extreme care, they can find themselves being hauled before the Employment Appeals Tribunal by former employees who feel that they've been wronged and aren't going to take it lying down.

The problem for many employers is that they are entering uncharted waters as they have little or no experience of implementing redundancies. Smaller firms in particular tend to struggle as they are unlikely to employ a dedicated human resources expert who can guide them through the legal pitfalls.

"A lot of employers make the mistake of thinking that a redundancy [situation] gives them a carte blanche to proceed as they wish," observes Richard Woulfe, head of employment and benefits at legal firm Mason, Hayes Curran. "There are a number of issues that they really have to be careful with."

First off, if they plan to let several people go within a short space of time, the employer must check whether this will constitute a "collective redundancy". This depends on the size of their workforce, and the number of people being laid off within a 30-day period.

If it is a collective redundancy, the employer is obliged to inform the Minister for Enterprise, Trade and Employment, and may also be required to conduct a consultation process with their workforce for at least 30 days before anyone is given notice of redundancy. Fines will apply for non-compliance with these obligations.

Even if it's not a collective redundancy, employers can still run into trouble. If an employee considers he or she was unfairly selected for redundancy, they can take a claim to the tribunal. What many employers may not realise is that the tribunal will assume that the employee is in the right - the onus is on the employer to prove otherwise.

To prove that a fair selection procedure was in place, the employer must be able to produce the selection criteria applied to all staff members that could potentially have been made redundant - for example length of service, punctuality, performance appraisals and so on.

The "last in, first out" principle is considered to be a reasonable selection criterion by the tribunal. The criteria must be objective and fair, rather than invented for the purpose of ousting a particular worker whom the employer happens to dislike.

Woulfe warns that women on maternity leave cannot be made redundant. Also, if a worker who has been closely involved in trade union activity or who has a disability is let go, the tribunal will wonder if there is a link between that activity or disability and the decision to select them. "So you've got to be able to prove that you've reached [the decision] for good and fair reasons," he explains.

Apart from applying fair and reasonable criteria, it is also essential that correct procedures are followed. Otherwise, employers leave themselves exposed to a compensation claim. Woulfe says the employer should consult with all employees who might conceivably be made redundant, let them know that their "name is in the frame" and provide them with details of the selection criteria that will be used to make the decision. "Let them go off with it and then come back and let them make any comments," he advises. "You shouldn't do it all in one go."

Redundancy should be introduced gradually, rather than breaking the news out of the blue once a decision has been made. "You shouldn't do that because it gives the employee no chance to make a representation," he says.

If the tribunal finds in favour of the employee, they can order the re-instatement or re-engagement of that person, or award compensation of up to two years' gross salary. In a case decided this year, an employer was unable to produce notes from meetings with the employee, or any documentation proving that it was in financial difficulty or a copy of the selection criteria used, so the tribunal upheld the employee's claim.

The employee expressed a desire to return to their old job, so the employer was ordered to reinstate them and pay them the year's salary that they would have received if they hadn't been let go, proving that failure to follow procedure can be a very costly mistake.