Our experienced Redundancy Solicitors understand that being made redundant can cause enormous stress. We strongly recommend early legal advice from an expert employment law solicitor.
What is Redundancy?
You can only be made redundant if you are dismissed because a job role in your employer’s business is disappearing. The business must therefore not only terminate your employment and pay you redundancy pay, but they must also follow the correct redundancy rules and procedure, and have a genuine reason for making staff redundant. The onus is on your employer to show that a dismissal is for a fair reason and one such fair reason is for a true redundancy.
If you have been employed for more than 2 years you also have a statutory right not to be unfairly dismissed. Even if you are being dismissed because of redundancy your employer must still follow a fair procedure to select you. If the employer falls down on its procedure you can claim unfair dismissal. Click here to read more about unfair dismissal
The business must therefore not only terminate your employment and pay you redundancy pay, but they must also follow the correct redundancy rules and procedure, and have a genuine reason for making staff redundant
Worried about redundancy? Call our specialist employment lawyers on Salisbury (01722) 422300 or FREEPHONE 0800 1404544 for FREE initial phone advice – with no strings attached
What is a fair reason for redundancy?
1. Cessation of business – has ceased or intends to cease carrying on the business for the purposes of which the employee is employed. This applies if an employer has or intends to cease carrying on the business for the purpose for which the employee was employed and is also applicable if the part of the business where the e business where the employee works is closed but the rest of the business continues
2. Move of place of business – has ceased or intends to cease carrying on the business in the place where the employee is employed. This applies if the employer moves or intends to move their place of business. Whether the move is sufficient to warrant a redundancy situation is based on the distance between the old and new premises and the level of inconvenience to the employee who is potentially being made redundant.
3. Surplus labour – no longer require the employee to carry out work of a particular kind because the work has ceased or diminished or is expected to cease or diminish. This applies where an employer requires fewer employees to carry out existing work or there is less work for existing employees. Redundancies can arise out of a work re-organisation where fewer workers are needed because of the introduction of new technology or where different skills are required.
4. No longer requires the employee to carry out work of a particular kind – because the work in the place where they were so employed has ceased or diminished, or is expected to cease or diminish
Getting redundancy wrong gives rise to an employment tribunal claim – which can be very expensive indeed for employers.
Do I qualify for Redundancy Compensation?
To qualify for a redundancy payment, an employee must have been both ‘dismissed’ and on the basis of ‘redundancy’. Workers being made redundant can claim the minimum lump sum redundancy compensation payment, although some have greater entitlement under their employment contract. You are entitled to minimum statutory redundancy payment if:
- You have been made redundant.
- You have 2 years continuous service since the age of 18.
- You are an employee.
- There is no suitable alternative employment for you. However, if you unreasonably refuse an offer of suitable alternative employment, you lose your statutory redundancy pay.
I have been offered a sum to go quietly
Our Employment Solicitors are aware that sometimes employers offer increased redundancy compensation payments to secure agreement from employees to leave employment and not make a subsequent claim. You may be asked to sign a settlement agreement, often referred to as a compromise agreement.
You should always seek legal advice before signing a compromise agreement as you are signing away your legal rights including the right to claim for unfair dismissal.
My employer has sold the business – the new employer wants to make me redundant
Special rules apply if there is a business transfer. Being made redundant in connection with the transfer either by your new employer, or by your old Employer reducing staff prior to sale, counts as automatic unfair dismissal.
Unfair Redundancy Dismissal
There are other situations where a redundancy becomes an unfair dismissal including:
- If the redundancy is not real, e.g. a direct replacement is recruited immediately after the employee has been made redundant.
- You were not consulted properly before being made redundant. Employees ust normally be notified in writing by the employer in advance of the likely redundancy and be invited to a meeting to discuss the situation.
- You are unfairly selected: the basis of choosing you as the employee to lose your job is not justified objectively as being fair and in accordance with employment law. Consideration is usually given to issues including time-keeping, length of service, productivity and future requirements of the employer.
- Failure to offer suitable alternative employment. Employers must consider whether there is suitable alternative employment within the business available to those workers being considered for redundancy. Full details should be provided by the employer of any alternative positions and the employee should be allowed a trial period if the new job is very different from the old one. Whether alternative employment is suitable depends on issues including the nature of the old job and the new one being offered. Employees unreasonably refusing an offer of suitable alternative employment lose their statutory redundancy pay and their chances of winning an unfair dismissal claim (or receiving full compensation if they do win) is significantly reduced.
This list is not exhaustive – for more information, contact our Employment Solicitors.
How long do I have to make my claim?
A redundancy compensation claim to an Employment Tribunal must be made within 3 months of the date of dismissal. This time limit is very strict and if you miss the deadline you will normally be unable to make a redundancy claim.
What statutory redundancy pay am I entitled to?
Workers are entitled to a written statement showing how their redundancy pay was calculated. Minimum statutory redundancy pay is calculated as follows:
- 1½ week’s pay for every year of continuous service when the worker was over 41 years old.
- 1 week’s pay for every year of continuous service when they were over 22 and under 41.
- ½ week’s pay for each year of continuous service under 22 years old.
The maximum number of years to count is 20. Weekly pay is subject to a maximum of capped at £479 [as at 24th May 2015]. The current maximum redundancy compensation is therefore £14,370.
Please also note that any redundancy pay (including any severance compensation) below £30,000 is not taxable.
Contact our Redundancy Solicitors today
If you are being made redundant, or are unsure if you have an compensation claim, contact us today for legal advice from an expert Redundancy Solicitor in our Salisbury, Andover, Fordingbridge or Amesbury offices.
Our employment law solicitors provide legal advice to both employers and employees on Redundancy Compensation throughout Wiltshire, Hampshire and Dorset and further afield .