Redundancy

Redundancy laws are intended to provide a fair and just framework through which this difficult, regrettable but sometimes unavoidable process can be carried out.

One of the most important aspects of redundancy law is the provision of statutory redundancy pay, which seeks to compensate you as an employee for your dismissal with a tax-free sum that proportionately reflects the length of service you have given to your company, provided you have been working there for more than two years.  Please click on the following link to calculate your statutory redundancy payment.  

Although often used by many people as a synonym for any kind of dismissal, redundancy is actually a well-defined legal term that refers to a specific type of dismissal. Redundancy is when a person is dismissed because they are no longer needed by his or her employer. Generally, this happens for one of three reasons:

  • Complete cessation of your employer’s business.
  • The shutting down of your employer’s place of work.
  • Reduction in the number of workers needed to do your job.

An employee may have an unfair dismissal claim if unreasonable criteria have been used to select the individual being made redundant. For the redundancy to be fair, your employer must have created an objective and justifiable set of criteria which are used to select the employee or employees to be made redundant (e.g. skills, qualifications, productivity, performance or disciplinary proceedings), and must then apply these criteria rigorously and without bias to all employees being considered for redundancy.

An employer is expected to follow a fair and reasonable consultation process so for example it would unlikely to be viewed as ‘fair or reasonable' if you are one of a number of employees doing the same job, and your employer selects you for redundancy without applying a selection criteria. In addition, if your employer can be shown to have selected you for redundancy using irrelevant or unjustifiable criteria (such as age, sex, race or disability),  it has clearly not carried out the selection process in a fair manner, and there is every likelihood that the redundancy can be classed as an unfair dismissal, for which you can make a claim in the Employment Tribunal. You may also have a claim for discrimination.

A fair and reasonable redundancy process will also consider if there are any suitable alternative positions the employee could be considered for which will avoid the need for the redundancy all together.  Equally if, an employer identifies a suitable alternative position and the employee rejects this then he or she would not be eligible for a statutory redundancy payment. 

LARGE SCALE REDUNDANCIES & COLLECTIVE CONSULTATION

If an employer is making more than 20 redundancies within 3 months from one establishment (or office), then the employer must first consult collectively with their employees.  If collective redundancy consultation is triggered, then the consultation period before notice of redundancy is given, must last at least 30 days.  If an employer is making 99 redundancies or more then the consultation period increases to at least 45 days. 

In the collective consultation period trade union or employee representatives should be appointed to represent the employees to enable a collective, or group, consultation to take place about the proposed redundancies.  After an employer has completed the collective consultation it is then required to consult individually with employees about their redundancy. 

If an employer fails to collectively consult, then an employee can bring a claim in an Employment Tribunal.  If the employee is successful in such a claim the Tribunal can make a protective award to that employee of up to 90 days’ gross pay.

If you believe that your redundancy rights are being infringed, or simply wish to know what your redundancy rights are, Ashby Cohen can provide you with detailed advice. Please contact us for an initial free consultation.

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