Redundancy

The prospect of redundancy can be overwhelming for everyone involved, particularly for employees. We can advise you on your rights and support you through the process.

What is redundancy?

Redundancy may occur where there is a business closure, workplace closure or a reduction in workforce. An employee’s dismissal will be by reason of redundancy if it is “wholly or mainly attributable to” one of these situations.

Employees’ rights during redundancy situations

When faced with a potential redundancy, you have the following rights:

• The right not to be unfairly dismissed (you must be continuously employed for a 2-year period as at the date of the dismissal);
• The right not to be selected for redundancy on certain prescribed grounds. These include pregnancy, whistleblowing or asserting a statutory right;
• The right not to be selected for redundancy because of a protected characteristic; and
• The right to be informed and consulted.

Collective consultation

In cases where an employer is making 20 or more employees redundant within 90 days, employers must:

• Inform and consult with employee representatives; and
• Notify the Secretary of State

An employer’s failure to inform and consult may result in an Employment Tribunal awarding up to 90 days’ pay per employee. Employers who fail to notify the Secretary of State may also receive a fine.

In addition, an employee may be entitled to bring a claim for unfair dismissal where their employer fails to follow a fair procedure when conducting their collective consultation.

Alternatives to redundancy

From the commencement of a fair redundancy procedure, an employer should consider all the alternatives to compulsory redundancies. They may offer a voluntary redundancy scheme, invite employees to consider early retirement or offer alternative employment within their organisation.

Redundancy payments

Employees with two years of service are entitled to a statutory redundancy payment. This calculation is based on an employee’s age, weekly pay, and the years they have been employed. You can calculate your statutory redundancy by using the Government statutory redundancy calculator.

Some employers may offer a redundancy package in excess of the minimum statutory redundancy payment. In these cases, the employer will often ask the employee to sign a Settlement Agreement setting out the terms on which the employee is being dismissed and the terms of the redundancy package. Before signing the Settlement Agreement, you must obtain independent legal advice on the agreement, which we can provide for you.

Get in touch

Please get in touch with our Employment Litigation team for friendly advice and support. You can contact us on 023 8063 9311 or email enquiries@warnergoodman.co.uk.