What is Redundancy?
Redundancy arises when a particular role is no longer required because it has ceased or diminished or is expected to cease or diminish.
Redundancy can arise in the following situations:
- Office closure
- Business restructure
- New technology
- Cost cutting
Employers looking to make redundancies must follow a fair process.
What is a Fair Redundancy Process?
In order for a redundancy to be fair there must be:
- A proper selection procedure (if there is a redundancy “pool”)
- Consideration of suitable alternative employment
Employees must also receive a Statutory Redundancy Payment and Notice Pay.
Statutory Redundancy Payment
If you have at least 2 years’ continuous service you are entitled to receive a Statutory Redundancy Payment. The amount will depend on your salary, age and length of employment. You can calculate your Statutory Redundancy Payment here.
Under the Employment Rights Act 1996 if you have been employed continuously for one month or more, but for less than 2 years, you are entitled to at least 1 week's notice. If you have 2 or more years continuous service you are entitled to a minimum of a week’s notice for every year of service, up to a maximum of 12 weeks. If your contract of employment entitles you to more than the minimum notice required by law then this will take precedence and you will be entitled to the greater period of notice in your contract. If your employer does not want you to work your notice you will be entitled to a Payment in Lieu of Notice (PILON).
A “sham” redundancy designed to disguise the real reason for ending your employment, or a flawed redundancy process could mean that you have been unfairly dismissed.
How can OWC help you?
If you have been put at risk of redundancy or been made redundant we can advise whether or not there appears to be a genuine redundancy situation and if your employer has followed a fair process. We can assist you in challenging the employer, either by appealing the decision to make you redundant or by issuing a claim for unfair dismissal in the Employment Tribunal. In many cases we can help employees obtain compensation out of court by negotiating a Settlement Agreement.