North West Employment Law - Specialist Employment Solicitors

AN EMPLOYEE’S GUIDE TO REDUNDANCY

Introduction

DiscriminationCompulsory redundancy is a dismissal.

An employer proposing redundancies needs to devise and operate a fair procedure of selecting those to be made redundant. The employer will sometimes try to agree the procedure with a trade union or employee representatives.

It is normal to ask for volunteers before making anyone compulsorily redundant.

If the employer is considering making 20 or more people redundant they must consult with the trade union or elected employees’ representative. Inadequate consultation may entitle those made redundant to a ‘protective award’ which can be up to 90 days pay if there is no consultation at all.

Selection for redundancy

Selection is usually based on a scoring system in which points are awarded under various criteria. The criteria are likely to include factors such as experience, skills, attendance, timekeeping and disciplinary record. Criteria should be objective so far as possible to reduce the risk of disagreement about scores. To avoid possible age discrimination length of service is often not considered.

An employee being considered for redundancy will normally be invited to two personal meetings.

The first meeting is to warn you that your job is potentially redundant. You do not have the right to take a colleague or trade union representative with you to this meeting but many employers will allow you to do so.

Make sure you know why it is your job that is at risk of redundancy and tell your employer if you think there are alternatives to redundancy (such as reduced hours or suitable alternative employment). Ask who else is being considered for redundancy. If you think some individuals or groups of workers should also be at risk let your employer know. If you are being compared with other employees make sure you understand on what basis selection for redundancy will be made. If you do not think the proposed selection process is fair, say so.

The second meeting is to tell you if you have been selected for redundancy. You are entitled to take a colleague or trade union representative with you to this meeting.

Ask if your employer has considered whether there are any alternative jobs. If your employer has assessed you as part of a redundancy selection process you should be told your scores. Ask for a copy of your score and the scores of anyone else with whom you have been compared. You may need the meeting to be adjourned to give you time to check the scores. If you think you have been incorrectly assessed or that someone else should have assessed you tell your employer why.

If you think that redundancy is not the real reason that you have been dismissed you must say so.

If You Think You Have Been Unfairly Selected For Redundancy

As a redundancy is a dismissal, you have the same right of appeal as if you had been dismissed for any other reason and the process for the appeal will be the same. Your employer should tell you how to appeal the decision.

Your letter of appeal should include all the points which you have made already that you think are still valid, plus any other points which you have thought of since.

The employer should then set a time for your appeal to be heard. You are entitled to take a colleague or trade union official with you to the appeal hearing to act either as a witness/note taker or as your representative.

Redundancy Payments

You have the right to a redundancy payment if you have been continuously employed for at least 2 years. The sum is based on age and number of years continuous service.

The figure is half a weeks pay for each full year aged under 22, one weeks pay for each full year aged 22-41 and one and a half weeks pay for each full year aged over 41. There is a limit of £380 per week (from 1st October 2009) and twenty years work. Hence to achieve the maximum award of £11,400 it is necessary to be at least 61 years old and to have 20 years continuous service. This payment is tax free.

Some employers make enhanced redundancy payments which are often much greater than the statutory sums.

Anyone who is made redundant is entitled to their notice pay whether or not they are required to work their notice period and to any other sums due such as accrued holiday pay. These payments are usually taxable.

Employees with at least two years continuous employment are entitled to reasonable time off work during the notice period to look for and train for new work but you are likely to lose pay if you take more than two days off for this.

If you have been unfairly selected for redundancy – rather than making a claim to an employment tribunal – it may be possible to negotiate an enhanced payment.

It is usually a condition of making an enhanced payment that the employee enters into a compromise agreement with the employer to prevent the employee making any further claims. See our ‘Guide To Compromise Agreements’.

Short-Time and Lay-Off

If you have been put on short time working or laid off for four consecutive weeks or for any six weeks in a thirteen week period and you want to leave that job, you can write to your employer to state that you intend to claim redundancy pay. The next steps depend upon your employer’s response. There are strict procedures and time limits to follow and you should seek legal advice.

Deciding Whether to Make an Employment Tribunal Claim for Unfair Selection

You have the right to claim that you have been unfairly selected for redundancy if you have continuous service of at least one year.

If the employer has used a fair procedure, Employment Tribunals will not normally interfere with their selection – especially if there are major job losses relative to the size of the employer.

Even if you are sure that you can show that you have been unfairly selected for redundancy any award made by the Employment Tribunal may be small. The standard redundancy payment is the same as the basic award which a tribunal would make (except for employees with between one and two years service) so no award will be made for this.

There is still the possibility of claiming for future losses for some months after the redundancy but if you have found another job at similar pay then future loss may be small or insignificant. Also, any enhancement to redundancy pay will be deducted from future losses.

For these reasons it is often preferable to try to negotiate an enhancement to the redundancy payment rather than bring a claim in the Employment Tribunal.

Bringing an Employment Tribunal Claim

Most claims have to be made within 3 months (3 months less one day) of the date of dismissal. There is a time limit of six months (less one day) for claiming statutory redundancy payments.  It is important to seek legal advice as advice as soon as possible. Do not wait for the results of an appeal hearing before you seek advice.

If your employer does not pay the redundancy payment, notice pay or holiday pay which you are due it is normally advisable to raise a grievance to try to resolve the issue with your employer before you make a claim to the Employment Tribunal.

This guidance is for general information only. Although it is intended to cover most situations, if you are in doubt on what action to take contact NORTH WEST EMPLOYMENT LAW on 01257 231458 and we can guide you through the procedure.