It’s a very worrying time for anyone facing a potential redundancy situation, and often difficult to know where you stand.
In this post our legal advisor Philip Landau provides some answers to the most commonly asked questions…
What is redundancy?
Redundancy occurs where:
- The employer’s business, or part of the business, has ceased to operate; and/or
- The employer’s business has moved to a different place; and/or
- The need for work of a particular type to be done has ceased or diminished.
Examples of redundancy situations
Examples of when someone may be genuinely made redundant include:
- The work the person does is no longer required, perhaps due to the employer moving into a new line of work which no longer needs the person’s skills, or a new process is introduced so that the job that was carried out is no longer necessary
- The employee’s job no longer exists because the work is being done by other employees
- The workplace has closed because the employer has ceased trading or has become insolvent
- The employer’s business, or the work the person is doing, moves to another location
- The employer’s business is transferred to a different employer
Even if there is a genuine redundancy situation, your employer must still follow a correct redundancy process (see below) failing which the redundancy can still be deemed to be an unfair dismissal.
Classic examples of non –redundancy situations
Employers often claim that there has been a reduction in the work needing to be done but this is not always the real reason for dismissal. It can be cheaper and less time consuming to label someone “redundant” rather than follow, say a performance process that could take many months. It may be that the employee is simply disliked and redundancy can be used as an excuse to fast forward that person’s exit from the company. It is important to look at all the circumstances surrounding the redundancy.
The following are examples which may indicate that the redundancy is not genuine:
- If your employer has recently taken on other people, or intends to do so in the near future;
- If you have been criticised about your performance and subsequently face a redundancy situation, this may indicate that your dismissal is more about your poor performance than a genuine redundancy;
- If you are the only person being made redundant, or one of only a few in a large company;
- If you are pregnant, a woman, from an ethnic minority, disabled, gay or of a particular religion, this might indicate you have been dismissed because of discrimination rather than because of a general need to reduce the workforce;
- If you have had a poor relationship with your line manager, this might indicate you have been dismissed for a reason other than a genuine redundancy one.
What is the redundancy process?
If a redundancy situation exists, your employer must consult all employees who are at risk of redundancy as soon as possible, informing them of the situation and discussing with them any alternatives and the implementation of the redundancy situation. Failure to consult may lead to a finding of unfair dismissal by a Tribunal. Where an employer is making 20 or more employees at one workplace redundant, there are minimum periods of consultation required, and sanctions can result if an employer does not follow them.
If there are other employees carrying out the same role as you, then your employer needs to establish a selection pool, with a number of criteria upon which you will be scored. Such criteria will usually include length of service, skills, sickness and performance record. There does need to be an objective and transparent process here. A perverse selection decision by your employer could be open to challenge.
Suitable alternative employment
If your employer intends to make you redundant, there is a legal duty to consider whether there are other jobs available which you would be capable of doing. If such suitable employment is available, it should be offered to you. If it is not, this can amount to unfair dismissal.
Whether an alternative job offered is suitable will depend on the terms of the job offered and your skills, abilities and circumstances. Factors such as pay, status, hours and location are relevant when deciding if a job is a suitable alternative.
How much is the redundancy payment?
If you have been employed with your present employer for a minimum of 2 years, you are entitled at the very least to a minimum statutory redundancy payment from your employer (although many employer pay more).
Statutory redundancy pay is worked out as follows:
- 1½ week’s pay for each complete year of employment when you were aged between 41-64 inclusive
- 1 week’s pay for each complete year of employment when you were aged between 22-40 inclusive
- ½ week’s pay for each complete year of employment when you were aged between 18-21 inclusive. Employment before the age of 18 is ignored when working out statutory redundancy pay.
The present weekly pay limit is £450.
If you are in any doubt about the genuineness of your redundancy, you should seek professional legal advice.
Jobsite have partnered with specialist employment law solicitor Philip Landau, to bring you expert advice on your rights in all key areas of your working life. As a Jobsite user you are also entitled to receive a free initial consultation on all employment law issues from Philip. Philip can help with a number of legal problems; perhaps you feel your employer isn’t following their legal responsibilities, you believe you have been dismissed unfairly or you are unsure about clauses in your contract. Once he knows your specific situation he can let you know what your rights are and what action you can take. To get in touch with Philip, click the link below and he will contact you to discuss your situation in more detail. Philip Landau is a solicitor and partner, specialising in employment law, in the London legal firm Landau Law Solicitors.
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