What is redundancy?
Put simply, redundancy is dismissal through enforced job loss. It can be caused by a number of factors such as the introduction of new technology or a new system making a job unnecessary, a job role ceasing to exist, employee numbers being reduced to cut costs or the business closing down or moving.
What are the responsibilities of the employer?
To select fairly
Your employer has a duty to use objective selection criteria that can be applied equally and fairly across the workforce in selecting staff for redundancy such as length of service, experience, skills and conduct/attendance records. People cannot be selected for redundancy on grounds of gender, sexual orientation, race, disability, religion, age or trade union membership.
To consult employees
Your employer should always consult you individually and consider all alternatives to redundancy.
If an employer is making 20 or more employees redundant in one establishment within a 90 day period, this is a collective redundancy. In the case of collective redundancies, employers have a duty to consult with the representatives of employees that could be affected.
Some employers might ask you to sign a compromise agreement that prevents you from subsequently taking legal action against them. You cannot sign a compromise agreement without having taken independent legal advice and obtaining an Adviser’s Certificate from a solicitor stating that you have been informed of all the rights you are giving up. You are not obliged to enter into a compromise agreement and should only do so if you feel completely satisfied with the terms.
To give the correct period of notice and redundancy pay
A termination notice tells you when the last day of your employment will be, e.g. the day you will be made redundant. If your contract does not include a notice period then you are entitled to the following, depending on your length of employment and minimum notice period:
Between one month and two years = one week;
Between two and twelve years = one week for each year of employment;
Twelve years or more = twelve weeks.
If you have been continuously employed for two full years, your employer should allow you “reasonable” time off during the notice period to look for another job, although your employer is not obliged to give you time off with full pay. You will pay tax and National Insurance on salary earned during the notice period.
Your employer may have included a payment in lieu of notice clause in your employment contract, which means your contract can be terminated without notice but you must receive payment for the salary you would have received during the notice period.
You may qualify for a redundancy payment if you are an employee who has worked continuously for your employer for at least 16 hours a week for two years and you are being made redundant. Your employment contract should detail the redundancy pay you are entitled to. Statutory redundancy pay is based on a calculation which uses your age and length of service.
Consult www.direct.gov.uk for advice on how to calculate your statutory redundancy pay.
You do not have a statutory right to leave before the end of your notice period and if you do so without your employer’s agreement, your redundancy pay may be affected.
When you get a redundancy payment your employer must by law give you a written statement showing how the payment has been calculated.
© CABA 2011