Redundancy Advice

We asked the experts about Redundancy

We asked Henry Doswell, Solicitor at ThomasMansfield Employment Law Specialists to provide our members with a summary of employment law.

What is redundancy?

In broad terms, an employee becomes redundant if his position is not required.  However, under the legal definition, a redundancy must fall within one of three situations for it to be genuine.

The three redundancy situations identified are closure of an entire business, closure of the employee’s workplace and a diminishing need for employees to carry out work of a particular kind.  Under the third situation the following reasons are often cited by your employer: new technology has made your job unnecessary, the requirement to cut costs results in the need for a more efficient use of labour or the job you were employed for no longer exists.

What procedures must your employer follow?

In order for any dismissal by reason of redundancy to be fair, the employees affected should be given as much notice as reasonably possible that their position is at risk of redundancy.

Your employer should select you fairly. Where a number of people perform the same or similar roles a selection process must be followed.. The employer may choose criteria reflecting the needs of the business.  The most commonly used reasons are: disciplinary records, sickness records and job performance, sometimes by reference to appraisals or in accordance with ratings given in the redundancy process.  If you believe that your employer has selected you unfairly you should appeal against the decision.

The employee should have the right to appeal any decision to dismiss.

You should be consulted about the redundancy and considered for any suitable alternative positions before any final decision is taken.

The statutory dismissal procedure should also be followed allowing the employee to state their case at a formal dismissal meeting.  At this meeting the employee has the right to be accompanied by a fellow employee or trade union representative.

The employee should have the right to appeal any decision to dismiss.  If appropriate this statutory dismissal procedure needs to be completed by the employee before they would be in a position to bring an unfair dismissal claim.

If twenty or more employees are proposed to be made redundant, the employer must follow a statutory consultation process for a minimum period of time with employee representatives as well as individuals.

The employee also has a statutory right to a reasonable time-off work to look for new employment.

What are you entitled to under a redundancy dismissal?

Employees have a right to notice and a statutory redundancy payment calculated by reference to age, length of service and weekly earnings (currently capped at £330).  You are also entitled to receive holiday pay for any accrued untaken holiday at the date your employment terminated as well as notice in accordance with your contract subject to a statutory minimum.

Your employer may also offer you an enhanced redundancy payment.  Normally this payment is made to you under the condition that you will sign a termination agreement, which is often referred to as a Statutory Compromise Agreement.

In order to then accept this enhanced redundancy payment, you would need to seek independent legal advice as to the terms and effect of the agreement.  This often also gives you the opportunity to challenge the redundancy dismissal and/or the proposed payments.