Employment law and redundancy


What is redundancy?

Redundancy occurs when an employer needs to dismiss one or more employees because there are, or are expected to be, fewer jobs. It could also be that the need for a particular job no longer exists.

Redundancies are more common in the current changing economic environment as firms or business units close, re-organise or are taken over and employers decide to reduce their workforce.

Valid redundancy

Under employment law, redundancy can occur if the requirement for the work you are doing has either ceased or is diminishing. The situations in which this generally occurs include:

  • Your employer’s business, or the business unit in which your job was located, has ceased operating
  • Your employer’s business has downturned and no longer has enough work for you to do
  • Your employer's business has been taken over (but see TUPE rules)
  • Due to a restructure or re-organisation your job is no longer required
  • The introduction of new technology means that your skills are no longer required
  • Your employer’s business, or the work you are doing, moves to another area

What processes should your employer follow?

If your employer proposes to make redundancies in your workplace there are certain processes they must follow under employment law. Before making redundancies, an employer should:

  • Consult with staff or staff representatives about the company’s plans
  • Encourage feedback and suggestions from employees – this is particularly so when 20 or more redundancies are proposed

Those being made redundant should:

  • Be selected according to an objectively fair process
  • Be given reasons for the redundancy
  • Be offered alternative employment where possible, with the option to accept suitable work for four weeks without losing the right to redundancy payment
  • Be allowed to take reasonable time off work, with pay, to look for alternative work or training
  • Continue to be paid entitlements

A redundancy will be automatically unfair if an employee is chosen for redundancy for any discriminatory reasons. If a redundancy is unfair an employee may be able to claim unfair dismissal at an employment tribunal.

Entitlements for being made redundant

Employees made redundant may be entitled to redundancy pay if they have worked for their employer for at least two years. The amount they will be entitled will depend on their:

  • Previous wage or salary
  • Age and ability to re-enter the job market
  • Length of employment and level of experience

Employees are also entitled to a notice period before their employment ends, or payment in lieu of notice. The employment contract may contain specific provisions regarding these and other aspects of redundancy. Employment solicitors can examine your employment contract and the applicable statutory law to determine your rights at law.

Do you think your redundancy is actually a case of unfair dismissal? Caven can put you in touch with an employment law specialist to determine if you have a claim. Please call us on 08001 221 2299 or complete the web-form above.

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