Redundancy – The Process And Your Legal Rights
Redundancy is a common course of action for many employers, particularly in circumstances where financial prospects are gloomy and a company might need to downsize.
The process of redundancy can be distressing and quite complex, but our guide below ensures that you have the relevant information you need.
Note that if you've been offered a settlement agreement as part of the redundancy process, it's important that you get in touch with us as soon as possible.
What Is Redundancy And What Are My Rights As An Employee?
Redundancy is a form of dismissal from your job, which happens for a variety of reasons, such as:
- Your employer has decided that they need to reduce their workforce
- Your employer is moving to another location or the company is closing down
- Your employer needs to restructure the business, which means that your role is no longer required
What Is Involved In The Process Of Being Made Redundant?
When you're made redundant, your employer must give you a minimum of 1 week's notice for each year that you have worked for them (up to a maximum of 12 weeks' notice) – always check your contract as you might have a more favourable notice period.
Your employer is obliged to conduct a reasonable consultation process with you. They will have to provide you with the reason as to why you're being made redundant, as well as explaining the redundancy process and addressing any questions or objections you have.
During the consultation period, your employer must:
- Look at ways in which they can minimise the impact of redundancy on their employees (financially or emotionally)
- Consider alternative options to redundancy
- Explore whether they can reduce the number of employees being made redundant – for example, offering them the chance to fill existing vacancies or giving them the opportunity to job share
Depending on the number of employees being made redundant, the consultation process used by an employer might vary.
Your employer might expect you to continue working during the redundancy process, but in some cases they might allow you to not attend work. Even if you don't attend work during the redundancy process, you will still be employed by your employer until the date on which your employment terminates.
At the end of the consultation period, your employer will let you know whether you are going to be made redundant or not.
If your employer believes that redundancy is the most appropriate option following the consultation period, they must have valid reasons for making you redundant and will need to share them with you.
Employers must use a consistent and objective method of selecting employees to be made redundant and have to base their decision on fair criteria, such as:
- An employee's skills, qualifications, and aptitude for work
- An employee's standard of work and/or performance
- An employee's attendance record
- An employee's disciplinary record
Your employer must ensure that they comply with anti-discrimination legislation whilst conducting the redundancy process. If you think you have been unfairly discriminated against, get in touch with us as soon as possible.
Before an employer makes an employee redundant, they should first consider whether there are any other available jobs within the business that are suitable for the employee to do – this includes existing vacancies and vacancies that might arise throughout the redundancy process.
If there are any roles available that are suitable for you, your employer should let you apply for them.
Note that an employer doesn't have an obligation to create a similar role to your current job.
If an employer doesn't offer you a suitable role that's currently available and cannot justify why you're not being offered the role, we can help you identify whether you can make a claim for unfair dismissal.
The Appeal Process
Different employers tend to have different appeal processes. If you want to appeal a decision that's been made or raise a grievance, it's important that you speak to one of our Employment Law solicitors as soon as possible.
How Do Redundancy Payments Work?
Redundancy payments are a way of compensating you for the loss of your job and their aim is to help cover your living expenses whilst you're seeking employment.
There are 2 types of redundancy pay:
- Statutory redundancy pay: this is the minimum amount of pay you're entitled to by law and is a requirement for all employees who have at least 2 years of service with their employers.
Your employer cannot pay you less than this amount, even if your contractual redundancy scheme states that you should receive a lower amount of pay.
- Contractual redundancy pay: some businesses have redundancy schemes in place for their employees, which you might have access to.
Your contract or staff handbook should have more information about this, but we recommend that you speak to a member of your employer's HR team for specific details of any workplace scheme.
Please note that you don’t need to have been employed for 2 years to get such a payment – each scheme has its own rules.
Your employer could offer you what's known as a settlement agreement in order to end the redundancy process. Formerly known as 'compromise agreements', settlement agreements are formal contracts between you and your employer.
As part of the settlement agreement, your employer might offer you a financial payment in return for you not pursuing any legal claims that might relate to your employment.
Simpson Millar Can Help You
No employer has the right to ignore the laws that protect your employment rights. If you're being made redundant and need some advice or believe you've been dismissed on unfair grounds, our Employment Law solicitors are dedicated to protecting your legal rights and will fight for the best outcome for your situation.
Contact our employment law solicitors now for further redundancy advice and to discuss how we can help
you by completing our, no obligation,
online enquiry form and we
will call you back or you can call us directly on freephone: 0808 129 3320.