Redundancy
When redundancy is on the horizon, it’s a stressful time for everyone. It’s not something that many employers relish because they should only use it as a last resort. And it’s an especially difficult time for those who are worried about actually being made redundant. So it helps to know what your rights are and where you stand.
First things first… why am I being made redundant?
The most obvious trigger for being made redundant is when an employer has ceased, or is intending to cease, trading. But there are, of course, other situations where it can legitimately apply too. If the work requirements within a business change, perhaps due to a downturn in orders or a change of location, for example, then redundancy may apply. The key is that a position of employment must become genuinely redundant and there must be no other options open to the employer.
It’s important to note that it is not acceptable for an employer to use redundancy as an excuse to dismiss an employee without there being a genuine redundancy situation. If this occurs, then you may be able to make a claim for unfair redundancy. So how can you establish if this is the case?
What should I check to establish if my redundancy is fair?
For redundancy to be fair, an employer must ensure certain criteria are met:
- Redundancy must be fair and not personal. It is about the role NOT the person.
- The process should be fair and unbiased. This means the process should entail both warning and consultation before a decision is made to make employees redundant.
- The final selection process must be based on fair selection criteria.
- Where 20 or more employees are made redundant within a 90 day period, the employer must collectively consult. This consultation can be via either a Trade Union or elected representatives. Failure to comply with this could entitle all employees affected to a protective award of 90 days pay.
- Normally there needs to be a reduction in the overall number of employees required within the business for the statutory definition of redundancy to be met. Thus ‘reorganisation’ may not be an adequate reason.
You should also note that once a final selection for redundancy has been decided, your employer has an obligation to then offer an employee alternative suitable employment within the business if it is available. So think about it… Was there a vacancy for which you could have applied but were not given the opportunity?
It’s not fair, other people who do the same job as me have stayed on…
If other employees who do the same job as you have been retained, then you should check to see if they were a) put in the selection pool with you, and b) the selection criteria were fairly marked. Selection criteria should be objective, not subjective, and should be assessed fairly.
Fair selection reasons include:
- Last in, first out – employees working for the company for the least amount of time can be selected first to go out as long as it is isn’t discriminatory
- Volunteers – an employer can put out a request for employees to choose to take voluntary redundancy
- Disciplinary record
- Carefully considered points based on skill, performance, qualifications an experience
Examples of unfair redundancy reasons include:
- Whistleblowing
- Selection based on age, race, gender or maternity – this would be discrimination
- Trade union membership
- Part-time or flexible work patterns
- Health and safety issues
- Taking lawful strike action
- Refusing to work Sundays
- Jury service
Additional useful points…
Redundancy is a complex matter, so it’s always sensible to take advice, but it helps to know that:
- You need two years’ service to bring an unfair dismissal claim in a redundancy situation, unless it’s for an automatically unfair reason, e.g.
- Refusing to work on Sundays
- Health & safety reasons
- Whistleblowing
- If you are pregnant, special rules apply. More information on this can be found here.
- Sometimes redundancies occur when there should be a TUPE situation. This would be where you perhaps should have been transferred to a new employer because they’ve taken over the business. More information on this can be found here.
- If you have 2 complete years of service you are entitled to a statutory redundancy payment.
- If your employer is insolvent, you may be able to recover your statutory redundancy payment from the state.
How is my redundancy payment calculated?
If you have worked for your employer for two years or more, your statutory redundancy payment is calculated like this:• Half a week’s pay for every year of service under the age of 22
One week’s pay for every year of service between the ages of 22 and 40
One and a half week’s pay for every year of service over the age of 41
Redundancy payments under £30,000 are tax free
What should I do now?
If you are being made redundant and are concerned that you haven’t been treated fairly, or have been dismissed for redundancy but have not yet received your redundancy payment, call us now on 0800 304 7254.
