REDUNDANCY: Your Rights
Written by Leah Waller
Senior Employment Consultant Solicitor
There is no getting away from the murmurings of REDUNDANCY at the moment but, what are your rights?
As both an Employer and an Employee, you need to know what the Redundancy Process should look like, what Redundancy is (in legal terms) and as an employee, what you are entitled to OR as an employer, what you can, can’t and should be doing.
So, first things first…
WHAT IS REDUNDANCY?
We all hear this word thrown about, sometimes in the correct context, but other times perhaps not so much.
So, let’s set a few things straight (without just regurgitating the definition given in the legislation).
In order for there to be a TRUE redundancy, the dismissal of an employee must be due to (whether wholly or mainly) one of the following reasons:
- the employer has STOPPED (or INTENDS TO STOP) the type of business for which that employee was employed;
- the employer has STOPPED (or INTENDS TO STOP) the type of business for which that employee was employed in the place WHERE that employee was employed;
- the requirements of the employer to carry out work of a particular kind, that the employee carried out have STOPPED or REDUCED, or they are EXPECTED TO STOP or REDUCE;
- the requirements of the employer to carry out work of a particular kind, that the employee carried out, in the place WHERE that employee was employed, have STOPPED or REDUCED, or they are EXPECTED TO STOP or REDUCE.
A practical example of when a redundancy may also occur, is where the employer requires fewer employees to do a particular kind of work although there has been no reduction in the volume of work or production, but where there has been a reorganisation of the workforce or a reallocation of functions between them disclosing a position of overmanning.
This is because although the volume of work may remain the same, the requirement of the business for employees to carry it out has reduced.
WHAT IS THE PROCESS?
The Redundancy Process may differ slightly depending on the number of redundancies that the Company is making.
A Redundancy Process should include the following stages:
- Consultation
Where there are between 20 and 99 employees being dismissed within 90 days then the Company must consult for at least 30 days before dismissal, where 100 or more employees are being dismissed within 90 days then the Company must consult for at least 90 days before dismissal. - Selection
As an employer, you may want to consider a Selection Matrix as a way of scoring those employees at risk of redundancy.
You should also look at alternative employment options or roles that are available.
- Notification of Redundancy
- Redundancy Payments (Calculation & Payment)
Should the Tribunal be involved in a claim in relation to redundancy, they will also consider:
- whether the employer warned and consulted the effected employees?
- whether the employer adopted a fair basis for the selection of the candidates that were selected for redundancy?
- whether the employer took reasonable steps to minimize redundancy or redeploy staff?
Thus, as an employer, you should bear these questions in mind throughout your Redundancy process.
WHAT AM I ENTITLED TO?
In order to be entitled to a statutory redundancy payment, an employee must have been employed for at least two years and also satisfy the test in relation to their dismissal being due to a redundancy situation (as set out above).
If you are entitled to a redundancy payment, and there is no enhanced payment due under your Contract of Employment, then you will be entitled to an amount calculated as follows:
| (Age Factor) x | Length of service x (maximum 20 years) |
gross weekly pay (maximum £538.00) |
|---|
0.5 – aged 21 and below
1 – aged 22 – 40 inclusive
1.5 – aged 41 and over
As an Employer, you do not need to do this alone, we are always happy to help with any questions, to guide you through the process and assist where required.
Employees; if you are being made redundant, or if you receive a Settlement Agreement, take advantage of our free consultation.
As always, if there is anything you require assistance with, our Employment Department at Greystone Solicitors offer a FREE initial consultation and are more than happy to help.
