Redundancy

Being made redundant can be incredibly stressful, and often creates feelings of anxiety and uncertainty. If you are facing redundancy, it is best to have as much information as possible to make the process less overwhelming. This article provides an overview of redundancy, from your rights as an employee to what action to take if you encounter a redundancy dispute.

What Is Redundancy?

Redundancy is when an individual is dismissed from employment because there is a need to reduce the workforce. This might be because of cost-cutting, the business is closing down or moving, or the job you were employed for no longer exists.

There are two different types of redundancy. A singular redundancy (or a small number of redundancies) is known as an 'individual consultation. In this instance, an employer must consult with the individual before the redundancy is confirmed, explaining the reasoning behind the decision and any alternative possibilities. Should this consultation fail to happen, then there may be grounds for unfair dismissal.

When twenty people or more are made redundant, this is called a 'collective redundancy'. In such cases, employers are obliged to consult with the representatives of the employees before redundancies are announced. As with individual consultations, if this step is not undertaken then there may be reason to make a claim at an Employment Tribunal.

Redundancy Payments.

Many employers have their own redundancy payment schemes. Nevertheless, there is a statutory scheme that all individuals being made redundant are legally entitled to. The only stipulation to qualify for redundancy payment is that you must have been working for your employer at least two years.

Statutory redundancy pay is based upon age and the time period of employment. It can be calculated as such:-

* One and a half week's pay for each year the employee was over 41 years old;

* One week's pay for each year in the employer was 22 to 41 years old;

* Half a week's pay for each year the employer under 22 years old.

However, there are times when an employer can compromise their right to redundancy payment. The main reason this happens is if an employer offers an employee facing redundancy 'suitable alternative employment' which is 'unreasonably refused'. If an employee cannot prove their refusal of another job was reasonable - perhaps in terms of pay, location, or job description - then they may forgo their validity for redundancy pay.

Disputes Over Redundancy.

Disputes over redundancy can happen for any number of reasons. More often than not, disagreements stem from whether or not the redundancy can be deemed as fair. There should be good reason to make someone redundant based upon objective evidence - for example, the job in question has been dissolved. If a just explanation cannot be provided then this could be classed as unfair dismissal.

Additionally, disputes may also arise over redundancy payments. This is particularly true when there is a question over a rejection of alternative employment, and whether or not this was reasonably refused.

Should you encounter a dispute with your employer regarding redundancy, you may be able to make a claim in the Employment Tribunal. However, this must be done within six months of being made redundant, and so you should not delay in seeking advice.

Summary.

If you have issue surrounding redundancy and you need more information, you should contact a legal expert for help. There are often times restrictions at play, so early legal advice may be vital.


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Gary Storer is Practice Manager for Pearson Rowe Solicitors Birmingham.