Job Insecurity and Labour Market Lemons: The (Mis)Management of Redundancy in Steel Making, Coal Mining and Port Transport

Abstract

Redundancy provisions in Britain have failed to promote organizational regeneration or labour mobility from declining to expanding firms/industries. On the contrary, as human resources are wantonly discarded through the (mis)management of redundancy, job security and X‐efficiency in the internal labour market has been severely eroded. In external labour markets, many redundant workers, the so‐called `lemons' of the labour market, are consigned to long‐term unemployment because employers are wary of hiring a worker that another firm does not want. These deleterious outcomes are elaborated through detailed case studies from steel‐making, coal‐mining and port transport, where mass redundancy has proved instrumental in the process of industrial restructuring. In order to re‐establish trust and security in the internal labour market, alternative methods of managing changing labour market requirements, based on reconversion rather than redundancy, are considered in the concluding section.