Restructuring and Redundancy
Have you been placed at risk of redundancy? Are you unsure about the process that your employer is following, or are you worried that you have been unfairly selected?
Whilst redundancy is a potentially fair reason for an employer to dismiss an employee, a fair procedure should be followed otherwise you may have an unfair dismissal claim.
Meaning of Redundancy
A redundancy situation can arise where, for example, your workplace is closing or moving, or your employer is ceasing trading altogether; or where your employer has a reduced need for employees to do work of a particular kind.
(for less than 20 redundancies)
The fair procedure that your employer is expected to follow will include:
- Identifying a genuine redundancy situation;
- Thinking of ways to avoid the need for compulsory redundancies, such as a recruitment freeze or asking for volunteers for redundancies;
- Correctly identifying the group of employees ‘at risk’ of redundancy (this will generally be employees doing similar roles);
- Making provisional selections for redundancy from the ‘at risk’ group, using objective selection criteria, such as performance and qualifications; and
- Consultation with those selected for a reasonable length of time.
If you have been provisionally selected for redundancy, your employer should consult properly with you before reaching a final decision on whether it needs to make you redundant. This will usually mean that your employer will hold several meetings with you to discuss the situation in more detail. You should use these meetings as an opportunity to discuss the basis for your selection, to put forward any suggestions of ways to avoid your redundancy and to consider any alternative employment opportunities.
At the end of the consultation period, your employer will confirm whether it is making you redundant, or whether an alternative to redundancy has been found. If you are dismissed for redundancy, you will usually have the opportunity to appeal that decision.
Your Financial Entitlements If You Are Made Redundant
If you are made redundant, the payments that you are entitled to will depend on how long you have been employed and the terms of your employment contract:
Statutory Redundancy Payment
If you have worked for your employer for at least 2 years, you will be entitled to a statutory redundancy payment, which is calculated using a set formula based on your age, length of service and weekly pay.
Enhanced Redundancy Payment
There may be enhanced redundancy payment entitlements included in your contract of employment.
The notice that you are entitled to will depend on the terms of your contract of employment and is also subject to a statutory minimum, which depends on your length of service. You may be required to work all or some of your notice period, or your employer may decide to pay you in lieu of your notice.
If you have accrued but untaken holiday as at the last day of your employment, you will be entitled to a payment in lieu of that holiday.
How Can We Help?
If you believe that there is not a genuine redundancy situation, or that your employer has not followed a fair procedure in selecting you for redundancy, then you may have a claim for unfair dismissal – see our guide to Unfair Dismissal.
Please contact a member of our team for more advice regarding restructuring and redundancy.