Redundancy

The need to make redundancies can be a stressful, and upsetting, process for both you and your employer. It can sometimes come unexpectedly and the need to quickly understanding your position can be vital.

Redundancy is also subject to a specific legislation and employers must ensure that they follow a fair redundancy process. It also provides employees with certain rights pertaining to redundancy, and if your employer does not act in accordance with the legislation, then you, as an employee, may have a claim for unfair dismissal.

If you are an employee who has been made redundant and you are not sure of your rights, we can assist you in navigating the process in order to ensure that your interests are best protected.

What is the selection process for redundancy?

As outlined, employers must select employees for redundancy in a fair way. If an employer is seeking to make a whole team of employees, or specific groups of staff, redundant then it will likely be easier for the employer to have identified a clear selection criteria and a list of roles to be made redundant. However, if an employer is, for example, looking to generally reduce the number of employees in the business, they will likely need to set up, and document, the selection criteria as well as make a list of roles to be considered for redundancy (known as a ‘selection pool’).

The criteria to be applied should be as objective and measurable as possible (i.e. they should be fair, not be affected by personal opinions and based on facts that can be measured), and you must use the same criteria for all employees in the same pool.

Examples of fair selection criteria could include:

1. The skills, qualifications and/or experience of the employees

2. The standard of work or performance of the employees

3. The attendance records of the employees (which must not include absences relating to disability, pregnancy or maternity)

4. The disciplinary records of the employees.

Is the process different for large scale redundancies (20+ employees)?

If your employer is proposing to make 20 or more employees redundant, within a 90-day period, then this will be, what is known as, collective redundancy and your employer  is required to follow an additional collective consultation process. If there is a recognised trade union then they will need to consult with the union, and they will also need to notify the Department for Business, Energy and Industrial Strategy of the proposed collective redundancies.

The collective consultation process does not replace the need for employers to individually consult employees and, should you find yourself in these circumstances, we can be on hand to provide you with pragmatic advice, and smoothly guide you through the process. 

How much redundancy pay will I be entitled to? 

If you have at least two years of continuous employment with your employer, and you are made redundant, you will be entitled to statutory redundancy pay. The redundancy payment will be calculated based on your age, your full years of employment with the business, and a capped weekly salary. The statutory redundancy payment is the minimum sum that your employer must pay to you in the event that you are being made redundant. 

Many business do, however, choose to offer more than the statutory minimum and in such circumstances, are likely to want you to enter into a settlement agreement (which will restrict their ability to bring any future claim against you, save for in the exempted circumstances) in return for payment to you of enhanced redundancy pay. 

If making enhanced redundancy payments, employers are required to apply a fair procedure for all employees, and it is not necessarily the case that you must accept the first offer made to you by your employer. Whilst there is no obligation for your employer to make any offer, or indeed any payment above the statutory minimum, it may be (for example, if you have a legitimate grievance with the business at the time) that you are able to use this to negotiate a greater enhanced redundancy payment.