Redundancy
Being made redundant is very distressing. If you have just been made redundant or fear you may be in the future, you need to know your rights. Here are the answers to the most frequently asked questions.
Am I entitled to redundancy payments?
You are entitled to redundancy payments if you are dismissed due to one of the following:- your employer has ceased, or intends to cease, to carry on the business for the purposes of which you were so employed
- your employer has ceased, or intends to cease, to carry on the business in the place where the you were so employed
- the requirements of the business for you to carry out work of a particular kind has ceased or diminished or are expected to cease or diminish
- the requirements of the business for you to carry out work of a particular kind, in the place where you were so employed, has ceased or diminished or are expected to cease or diminish
The right to be consulted applies when an employer proposes to make 20 or more employees redundant over 90 days or less. In this case, the law defines redundancy as:
'dismissal for a reason not related to the individual concerned or for a number of reasons all of which are not so related.' This definition might include, for example, a situation where dismissals aren't related to the conduct or capability of the individuals.’
What is redundancy pay?
You have the right to a lump sum 'redundancy payment' if you are dismissed because of redundancy. The amount is related to your age, length of continuous service with the employer, and weekly pay up to a maximum. The employer must also provide you with a written statement showing how the payment has been calculated at or before the time it is paid.
Any dispute about whether a redundancy payment is due, or about its size, can be determined by an employment tribunal. If your employer has cash-flow problems so serious that making the redundancy payment would put the future of the business at serious risk, the Redundancy Payments Service (RPS) can arrange to pay you direct from the National Insurance Fund. If your employer is insolvent, the RPS makes the payment and the debt is recovered from the assets of the business.
How should my employer be selecting employees for redundancy?
Your employer should be using objective criteria wherever possible, precisely defined and capable of being applied in an independent way, when selecting employees for redundancy. This is to ensure that you are not selected unfairly. The chosen criteria should be consistently applied by all employers, irrespective of size. There should also be an appeals procedure.
Examples of such criteria:- attendance record (if this is fully accurate and reasons for and extent of absence are known)
- disciplinary record (if this is fully accurate)
- skills or experience
- standard of work performance
- aptitude for work
When are redundancies 'unfair'?
You will be found to have been unfairly dismissed if you were unfairly selected for redundancy:- for asserting a statutory employment right
- on parental leave or maternity-related grounds
- because you work part-time
- because you are a fixed-term worker
- for exercising or seeking to exercise the right to be accompanied at a disciplinary or grievance hearing
- requesting flexible working arrangements
- for a reason relating to rights under the Working Time Regulations 1998
- for a reason relating to rights under the National Minimum Wage Act 1998
- for a reason relating to the Tax Credits Act 2002
- for Whistle-blowing
- for participation in trade union activities, for membership or non-membership of a trade union and in respect of trade union recognition or derecognition
- for carrying out duties as an employee representative or candidate for election for purposes of consultation on redundancies or business transfers
- for taking part in an election of an employee representative for collective redundancy purposes
- for taking action on health and safety grounds as a designated or recognised health and safety representative, or as an employee in particular circumstances
- for taking part (or proposing to take part) in consultation on specified health and safety matters or taking part in elections for representatives of employee safety
- for taking lawfully organised industrial action lasting eight weeks or less (or more than eight weeks in certain circumstances)
- for refusing or proposing to refuse to do shop work or betting work on Sundays (England and Wales only)
- for performing or proposing to perform the duties of a occupational pension scheme trustee
- for performing or proposing to perform the duties of a workforce representative for the purposes of the Transnational Information and Consultation of Employees Regulations 1999
Should my employer help me to find other work?
In addition to allowing time off to look for new work or for training, it's good practice for employers to give you as much information as possible to help you at this difficult period of you working life. Such information may include:- the financial effects of your redundancy (redundancy pay, pension payments and state benefits)
- how to complete application forms and present yourself at job interviews
- the importance of discussing the implications of redundancy with your family as early as possible
- how to search for appropriate vacancies in the press and follow up opportunities
- the importance of being prepared to consider a wide range of alternative jobs
What information must my employer disclose about proposed redundancies?
To ensure your representative can play a useful part in the consultation process over proposed redundancies your employer must disclose certain information in writing including:- reasons for the proposed redundancy
- numbers and descriptions of employees affected
- proposed method of selecting the employees who may be dismissed
- proposed method of carrying out the dismissals, taking account of any agreed procedure, including the period over which the dismissals are to take effect
- how redundancy payments, other than the legal minimum, will be calculated
What if my employer fails to consult about proposed redundancies?
In cases where employers have failed to consult with employee representatives over proposed redundancies an employment tribunal can make a 'protective award'. The employer is required to pay employees covered by a protective award their normal week's pay for each week of a specified period, known as the protected period, regardless of whether or not they are still working. To be covered by an award, you must:- belong to a group specified in the award
- be someone your employer plans to dismiss or has already dismissed as redundant
- be someone for whom your employer has failed to comply with the information and consultation requirements
Acas: www.acas.org.uk
Dept for Business, Enterprise & Regulatory Reform (BERR): Statuary rights for employees Click here
Redundancy payment ready reckoner: Click here
Redundancy Pay Calculator: Click here
