Employment Law Redundancy

Rarely does anyone like being made redundant from their job. In a way it feels like a soft version of 'getting the sack,' but redundancy isn't the same. However, it is a potentially valid reason for dismissal, and there can be certain benefits, such as redundancy pay, if employees have worked at the job long enough to qualify. The redundancy consultation process can be quite involved and it is often worthwhile for employers and employees to take advice upon it.

In employment law, redundancy procedures can only progress fairly if the employer has genuine reasons and grounds for making employees redundant. These grounds include: the employer having ceased to trade; the employer being forced, for whatever reason, to relocate operations to somewhere too far away for the employee to be reasonably expected to commute; the employer having no further use for an employee’s skills, because those skills are "expected to cease or diminish," or they have already "ceased or diminished"; the employer has stopped, or is planning to stop, doing whatever type of work the employee was originally hired to do.

In order to become eligible for redundancy rights, an employee must have worked for a minimum of two years continuous employment. There should be a reasonable level of redundancy consultation between the employer and the employee as the process progresses. In this way the employee is kept informed throughout and is given an opportunity to put forward his or her point of view and alternatives to redundancy.

Employers

It is necessary that an employer is able to show clearly that every possible step has been taken to avoid the loss of a job, or jobs, before the formal notice of redundancy is served to an employee. The consultation period is not fixed, but if the number of employees to be made redundant is between 20 and 99, then there should be a clear 30 days between consultation starting and the first dismissal date. If the number of employees to receive redundancy exceeds 100, then the statutory consultation period prior to the first dismissal should be at least 45 days.

Where at least 20 employees are at risk the redundancy consultation process is particularly involved and employees will need to consult with employee representatives.

Employers should inform staff as soon as possible about what is to happen. When rumours start to circulate, morale starts to drop and tensions between employer and employees will increase. Employers should let all affected staff know what is happening, and why it has to happen, as well as the likely timescale that it will happen in. This approach will minimise problems likely to arise as a result of the redundancy.

Employees

Employees should only receive a formal notice of redundancy after a period of consultation with the employer. The employer must be prepared to explain why each employee has been chosen for redundancy, and the criteria used. The employer also has to discuss how redundancy may be avoided, whether by finding alternative work, retraining or otherwise.

Employees will receive redundancy pay based on their time worked. The employer should calculate this for the employee and explain how the figure was arrived at. If, after you have been made redundant, you, as an employee, feel that you have been unfairly made redundant, then you can take your former employer to an employment tribunal claiming unfair dismissal.

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