There are a host of circumstances in which an employer may wish to terminate an employee’s contract, but only certain types of situations come within the scope of the term ‘redundancy’. Regarding employment law, a dismissal can only be ‘redundancy’ when:
• The workplace is closing down
• Fewer employees are needed (or are expected to be needed) to carry out a particular type of work
• The company stops carrying out the type of work for which the worker was employed
• The company’s business has shrunk
These are referred to as ‘redundancy situations’. The job that the employee was carrying out should have disappeared – if their contract is terminated and the company immediately hires someone else as a direct replacement this will not typically be considered redundancy.
Yes, employers have a duty to consult with staff who may be affected by redundancies. This period of consultation should last for a ‘reasonable’ length of time – while this may change depending on the particular circumstances, it is usually expected to be at least one week. One of the purposes of this period of consultation is to explore alternatives to redundancy or ways to reduce the number of dismissals that may result.
A company must employ a set of objective criteria to establish which workers should be made redundant. While there are no set rules as to what will be considered ‘objective criteria’ the employer is expected to be able to demonstrate the approach it has taken. This could be a simple ‘last in, first out’ approach, or one that involves identifying skills held by individual employees.
Yes, employers must give workers this opportunity. If you do not afford them the right of appeal, there may be grounds for an unfair dismissal claim.
Yes, employees who have two or more years of service are entitled to a statutory redundancy payment. This amounts to a week’s pay (not exceeding £508) multiplied by the number of years worked. If the employee is over 41, a multiplier of 1.5 for years worked is used.