EMPLOYMENT LAW FOR EMPLOYEES

Redundancy Solicitors: Support for Employees

Expert Legal Advice and Support for Employees during Redundancy

If you find yourself facing redundancy and don’t know if your employer is treating you fairly or following the correct legal process, our team is here to help.

Redundancy occupies a complex corner of Employment Law, which can be difficult to understand and navigate from an employee perspective. Our expert team of redundancy solicitors are well equipped to help you approach everything from notice periods to redundancy packages; checking to see whether everything is properly handled by your employer and whether the treatment you receive is fair.

There is no standard way of managing a redundancy exercise. Employers finding themselves facing the need to make cutbacks and redundancies after a change in company direction, funding or income must tread carefully to ensure fair treatment of employees.

As an employee facing redundancy, it is crucial that you are aware of your rights: including your right to fair treatment, adequate notice, a breakdown of the reasoning and the chance to consult with your employer. Some businesses will go further by offering support in finding a new role, good references, and time off to find a new job.

Usual reasons given by employers leading to redundancy

Redundancy is a term used in UK employment law to describe a specific situation where an employer needs to reduce their workforce. It occurs when an employee’s job ceases to exist, either due to the closure of the business, the closure of the specific workplace, or a reduced need for employees in a particular role.

Redundancy can be a fair reason for dismissal under certain circumstances, but employers should implement any redundancy process carefully, following the correct procedures to ensure that both the process they follow and the outcome that is reached is demonstrably fair. The key elements of a genuine redundancy situation are as follows:

Job disappearance:

Redundancy within its legal definition occurs when the job itself ceases to exist. This can happen due to various reasons, such as technological advancements, changes in business requirements, or restructuring within the organisation.

No suitable alternative employment:

Before making an employee redundant, the employer must demonstrate that there are no suitable alternative roles within the organisation for the employee to be redeployed into. Employers are expected to make reasonable efforts to identify alternative employment opportunities.

Fair selection process:

If multiple employees are at risk of redundancy, the employer must establish a fair and objective selection process to determine who will be selected for redundancy. The selection criteria should be based on fair and non-discriminatory factors, such as skills, qualifications, performance, and length of service.

Consultation:

Employers have a legal obligation to consult with affected employees individually and, if necessary, collectively with trade union representatives or employee representatives. The purpose of consultation is to explore alternatives to redundancy and mitigate the impact on employees.

Redundancy pay:

Eligible employees are entitled to receive statutory redundancy pay, calculated based on their age, length of service, and weekly pay, subject to certain limits. Some employment contracts or collective agreements may provide for enhanced redundancy pay. Sometimes enhanced settlements can be negotiated in individual circumstances.

It is crucial for employers to follow a fair and lawful process when implementing redundancies to avoid potential claims of unfair dismissal or discrimination. Employees who believe that their redundancy was unfair or carried out improperly may have grounds for legal action.

It is important to note that redundancy is a complex area of employment law, and specific circumstances can significantly impact individual cases. If you are facing redundancy or have concerns about the redundancy process, seeking advice from an experienced employment lawyer is recommended to understand your rights, explore options, and ensure your interests are protected.

Understanding your entitlement to a redundancy payment

You may be entitled to claim a redundancy payment if you meet certain criteria. A redundancy payment is a form of compensation provided to employees whose jobs are made redundant. The eligibility requirements for claiming a redundancy payment include:

Employee status:

To be eligible for a redundancy payment, you must be classified as an employee, rather than a self-employed contractor or agency worker. It is important to establish your employment status before determining your entitlement.

Length of service:

Generally, employees must have a minimum continuous service of at least two years with their employer to be eligible for a statutory redundancy payment. This period of service is commonly referred to as the “qualifying period.”

Genuine redundancy:

The job loss must result from a genuine redundancy situation, meaning that the job itself ceases to exist or the employer’s need for employees in that particular role diminishes. Redundancies can occur due to various reasons, such as business closures, workplace closures, or a reduced need for staff.

Employee’s age:

The employee must be below the age of retirement (currently 66 in the UK) to claim a statutory redundancy payment. However, there is no age limit for enhanced redundancy payments that may be provided under an employment contract or collective agreement.

Calculation of Redundancy Payments

The calculation of redundancy payments is based on the employee’s age, length of continuous service, and weekly pay. The current statutory redundancy payment formula is as follows:

  • Under 22 years old: Half a week’s pay for each full year of service.
  • Aged 22 to 41: One week’s pay for each full year of service.
  • Over 41 years old: One and a half week’s pay for each full year of service.
  • There is an upper limit on the weekly pay used for the calculation, which is currently £544 (subject to periodic updates).

It’s important to note that redundancy payments are subject to income tax, but the first £30,000 may be tax-free. Additionally, some employment contracts or collective agreements may provide for enhanced redundancy payments that go beyond the statutory minimum.

If you believe you meet the eligibility criteria for a redundancy payment but your employer is not providing one, you should seek legal advice from an experienced employment lawyer. Our employment law solicitors can assess your specific circumstances, review your rights, and help you understand your options for pursuing a redundancy payment.

What is the difference between redundancy and other types of dismissal?

It is essential to understand these distinctions to determine the appropriate legal framework and employee rights associated with each situation. Here are the main differences:

Redundancy:

Redundancy occurs when an employer needs to reduce the workforce, either due to business closure, workplace closure, or a reduced need for employees in a particular role. Redundancy is typically a situation-driven dismissal, unrelated to an individual employee’s performance or conduct. It involves the elimination of specific jobs rather than targeting individual employees.

Key features of redundancy:

Job disappearance: Redundancy arises when the job itself ceases to exist.

Eligibility for redundancy pay: Employees with at least two years of continuous service may be entitled to statutory redundancy pay.

Selection process: Employers must use fair and objective criteria to select employees for redundancy, such as skills, qualifications, performance, and length of service.

Consultation: Employers must consult with employees individually and, if applicable, collectively with trade union representatives or employee representatives.

Unfair dismissal:

Unfair dismissal occurs when an employee is dismissed by their employer, and the reason for dismissal is deemed unfair or unjust. Unlike redundancy, unfair dismissal is typically related to the individual employee’s conduct, capability, or performance, rather than the elimination of jobs.

Key features of unfair dismissal:

Unfair reasons: Dismissal may be considered unfair if it is based on discriminatory grounds, an employee’s exercise of employment rights, or if the employer fails to follow a fair dismissal process.

Qualifying period: Employees must generally have at least two years of continuous service to claim unfair dismissal (subject to certain exceptions, such as cases of discrimination).

Remedies: If a claim of unfair dismissal is successful, the remedies can include reinstatement, re-engagement, or compensation.

Constructive dismissal:
Constructive dismissal occurs when an employee resigns due to the employer’s conduct or a fundamental breach of contract, which makes the working conditions intolerable. It is a resignation in response to the employer’s actions rather than a direct termination by the employer.
Key features of constructive dismissal:

Breach of contract: The employee must demonstrate that the employer’s conduct or actions breached an essential term of the employment contract.

Resignation: The employee must resign promptly in response to the breach and treat themselves as “constructively dismissed.”

Unfair dismissal claim: Employees must generally have two years of continuous service to bring an unfair dismissal claim based on constructive dismissal.

Understanding these distinctions is crucial, as each type of dismissal carries different legal implications and employee rights. If you have concerns or questions about your specific situation, don’t hesitate to speak with our expert employment lawyers to seek advice. They can give you guidance based on the details of your case.

What is meant by unfair dismissal by reason of redundancy?

Unfair dismissal by reason of redundancy refers to a situation where an employee is dismissed due to redundancy, but the dismissal is deemed unfair under UK employment law. Although redundancy itself is a potentially fair reason for dismissal, employers must still follow proper procedures and meet certain criteria to ensure the dismissal is fair. If an employer fails to meet these requirements, the employee may have grounds to claim unfair dismissal. Here are the key aspects of unfair dismissal by reason of redundancy:

Failure to establish a genuine redundancy situation:

To justify a redundancy dismissal, the employer must demonstrate that there was a genuine redundancy situation. This means that the job the employee held either ceased to exist or the need for employees in that role diminished. If the employer cannot establish the genuine redundancy situation, the dismissal may be considered unfair.

Inadequate consultation:

Employers have a legal duty to consult with employees who are at risk of redundancy. Consultation involves discussing the proposed redundancy, exploring alternatives, considering employee input, and taking steps to mitigate the impact. Inadequate or insufficient consultation can render the dismissal unfair.

Unfair selection process:

When multiple employees are at risk of redundancy, employers must use fair and objective selection criteria to determine who will be selected. This may involve considering factors such as skills, qualifications, performance, and length of service. If the selection process is unfair, biased, or discriminatory, the dismissal may be deemed unfair.

Failure to offer suitable alternative employment:

Employers are expected to make reasonable efforts to offer suitable alternative employment to employees at risk of redundancy. If suitable alternative roles exist within the organization, and the employer fails to offer them to the affected employee without reasonable justification, the dismissal may be considered unfair.

Lack of redundancy pay or proper notice:

Employees with at least two years of continuous service are entitled to statutory redundancy pay, calculated based on age, length of service, and weekly pay (up to a certain limit). If the employer fails to provide the appropriate redundancy pay or fails to give proper notice of the redundancy, the dismissal may be deemed unfair.

It is important to note that employees generally need at least two years of continuous service to claim unfair dismissal by reason of redundancy, although there are exceptions for cases of discrimination or whistleblowing. Employees who believe they have been unfairly dismissed due to redundancy should seek legal advice promptly. Our expert employment lawyers can assess the specific circumstances of your case, review the dismissal process, and guide you through the appropriate legal recourse.

Redundancy FAQs

What is redundancy?

Redundancy is a situation where an employer needs to reduce their workforce because the job ceases to exist or there is a diminished need for employees in a particular role. It is a potentially fair reason for dismissal, but it must be carried out in accordance with legal requirements.

How do I know if my redundancy is genuine?

A genuine redundancy arises when the job itself ceases to exist or the employer’s need for employees in that role diminishes. Your employer should provide a clear explanation and evidence of the business reasons behind the redundancy.

Can I be made redundant if I am the only one in my role?

Yes, it is possible to be made redundant even if you are the only employee in your role. Redundancy is based on the job becoming redundant, not the individual employee.

Can I challenge my redundancy?

If you believe your redundancy is unfair or not genuinely based on redundancy, you may have grounds to challenge it. Seeking legal advice is advisable to assess the specific circumstances of your case and explore potential legal remedies.

What is the consultation process in redundancy?

Employers have a legal obligation to consult with employees who are at risk of redundancy. Consultation involves discussing the proposed redundancy, exploring alternatives, and considering employee input. The length of consultation can vary depending on the number of employees affected.

Can I request alternative employment within the company?

Yes, you have the right to request suitable alternative employment within the company. Employers are expected to make reasonable efforts to offer such roles to employees at risk of redundancy. However, there is no guarantee of alternative employment, and the availability of suitable roles may vary.

What is statutory redundancy pay?

Statutory redundancy pay is a legal entitlement for eligible employees who have at least two years of continuous service. The amount is based on your age, length of service, and weekly pay, subject to certain limits.

Can I negotiate a higher redundancy package?

While statutory redundancy pay sets a minimum entitlement, you may negotiate a higher redundancy package with your employer, especially if there are enhanced redundancy terms in your employment contract or collective agreement.

What are my notice period and rights during redundancy?

Your notice period will depend on your employment contract and statutory minimums. During the notice period, you have the right to continue receiving your salary and benefits, and you may be entitled to paid time off to search for new employment.

Can I claim redundancy if I find a new job quickly?

If you secure new employment before your notice period or within a short period after your redundancy, it may affect your eligibility for redundancy pay. It is advisable to seek legal advice to understand how your new job may impact your entitlements.

Employment Law Specialists at Atkins Dellow

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