Redundancy process : What are my rights and entitlements?

We regularly advise employees in redundancy situations and assist them with any queries or concerns they may have. If you have been placed at risk of redundancy, or have been made redundant, it is important that you are aware of the redundancy process that should be followed by your employer and what your entitlements are.

What is the redundancy process?

At our fixed fee employment law advice meeting we will go through the redundancy process with you, discuss your circumstances and answer any queries you may have, as well as discussing next steps and options for you moving forward.

What is the definition of a redundancy?

A redundancy situation can arise in a variety of circumstances. The legal definition of a redundancy covers situations where:

• your employer has entirely closed their business;
• your employer has ceased to do business in a particular place where you were employed; or
• there is a reduced need for employees to do work of a particular kind.

Employers should ensure that the circumstances genuinely fit into one of the above categories before undergoing a redundancy process. Otherwise, there is a risk that the redundancy is a ‘sham’ and that they are perhaps trying to shield the real reason for a dismissal under the guise of a redundancy.

I have been selected for redundancy – how has my employer decided this?

An employer should firstly select the employees to be placed at risk of redundancy. This should involve appropriately ‘pooling’ together employees. The employer should consider the type of work carried out by staff and whether any have similar or interchangeable roles and skills such that they should be grouped together in the same pool. If an employee’s role is entirely unique, then a pool of just one employee can be justified in these circumstances.

Once an employer has identified the pool of employees, it should then fairly apply objective selection criteria to that pool to determine the employees to be placed at risk of redundancy. Examples of objective selection criteria could be attendance or any disciplinary records. Employers should avoid using criteria such as “employee attitudes” as these are rather more subjective and difficult to measure, introducing a risk of bias. Employers may often use a scoring matrix system to apply these criteria, with those employees with the lowest scores being the ones who are provisionally selected for redundancy.

Consultation

If you have been placed at risk of redundancy your employer should then be carrying out a consultation process with you.

This involves your employer explaining the business circumstances and reasons why you have been placed at risk of redundancy. They should explain the selection criteria and basis on which these have been applied.

The consultation process is also an opportunity to allow you to express your own views or to raise any questions you may have.

During the consultation process an employer should also consider whether there is any alternative employment that may be suitable and reasonable for you within the organisation.

Fundamentally, the employer should be approaching the consultation process with an open-mind, without having predetermined the redundancy decision.

For larger scale redundancies where the employer is proposing to dismiss as redundant 20 or more employees within a period of 90 days or less, the employer has obligations in terms of collective consultation alongside which should take place alongside the individual consultation.

A failure to follow the proper redundancy process can lead to employees bringing claims for unfair dismissal. Provided you have at least 2 years’ continuous service with your employer, we can discuss the protection available to you from being unfairly dismissed and the tribunal route that may be open to you, if you would like to pursue the issue formally.

What am I entitled to if I have been made redundant?

If your employer has decided to make you redundant then, provided you have at least two years’ service, you would be entitled to a statutory redundancy payment.

A statutory redundancy payment is calculated based on your age, length of service, and weekly pay. For the purposes of the calculation the weekly pay is currently capped at £571, the length of service is capped at 20 years, and the total maximum redundancy payment is £17,130. The weekly pay limit and maximum redundancy payment increases each year.

The Government has produced a statutory redundancy calculator. Whilst this is the statutory amount of redundancy pay, your employer may provide for enhanced redundancy terms that go beyond the statutory entitlements.

We can discuss the redundancy process that is being followed by your employer to ascertain whether there are any problems or errors in their approach such that the redundancy can be challenged. Whether you wish to challenge the redundancy and remain working for your employer, or you would like to leave and potentially consider bringing a claim, we can discuss this with you.

Please use our ‘get in touch’ button on our fixed fee web page or contact Adam Wheal or Sarah Hayes if you would like to discuss your redundancy situation in further detail.