Redundancy and the law

If you have been – or are about to be – made redundant, you should know that you are not alone and there is plenty of help and guidance available to you.

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Do you feel you the reasons for your redundancy are unfair? Or do you have a financial claim against your employer after being made redundant? If you think you may have a legal case against an employer regarding a redundancy – we can help, whatever your circumstances may be.

What is redundancy?

Redundancy happens when an employer decreases their workforce. You can only be made redundant if:

  • The business closes down.
  • The business continues but the building where you work closes down.
  • The business requires fewer employees to carry out the work you do.
  • The introduction of new technology makes your job unnecessary.
  • Your employer’s business is slowing down and they need to cut costs by reducing staff numbers.

Any dismissal which does not fall within the above definitions is not a genuine redundancy. Although employers will often label dismissals as redundancy, the two things are not the same.

For this reason, if you lose your job and your employer gets someone to replace you, this is not a redundancy. In such circumstances, you may have grounds to make a claim for unfair dismissal.

What information am I entitled to from my employer?

If your employer wishes to make you redundant, they must go through a process of group consultation with any employees who are potentially affected. The exact nature of the consultation will depend on the number of employees that the company proposes to make redundant.

However, as standard procedure your employer should give you answers to the following questions:

  • What are the reasons for the redundancy proposals?
  • Which members of the workforce are at risk of redundancy?
  • Are there any alternatives to compulsory redundancy?
  • When will the redundancies occur?
  • What are the selection criteria?
  • How will they make redundancy payments?

The consultation should be a two-way process that requires your involvement, and you should discuss any alternatives to redundancy (ACAS website). This could include moving to another branch of the company, pay freezes or the removal of overtime.

At your consultation, you should not be afraid to ask difficult questions, or to suggest possible alternatives to compulsory redundancy. If your employer intends to make more than 20 employees redundant in a 90-day period, then further collective consultation is necessary by law.

How do employers decide who to make redundant?

Redundancies may be compulsory or even voluntary. However, in cases where the employer must choose which members of their workforce to make redundant, they may use the following criteria to help make the decision:

  • Skills or experience.
  • Standard of work performance.
  • Aptitude for work.
  • Attendance record.
  • Disciplinary record.
  • Formal qualifications and advanced skills (not in isolation).

Employers must ensure that information regarding attendance and disciplinary records is fully accurate. They must also make sure that they know the reasons for and extent of any absences before making a decision based on these criteria.

If your employer has made you redundant without using a fair selection procedure, you may be able to claim for unfair dismissal and you may be entitled to compensation from an employment tribunal.

However, if you are offered an alternative job during the redundancy process and you turn it down, you may lose your right to redundancy pay.

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Can I appeal the decision to make me redundant?

Yes, you should be given the right to appeal. If you wish to do so, you should tell your employer in writing. Your letter should set out the grounds for your appeal.

If your plea is unsuccessful, you have the option of going to an employment tribunal. After your employer tells you of the decision to make you redundant, you have three months to take a claim to a tribunal.

What payments am I entitled to?

If you have been working for the company for less than two years, you are only entitled to your notice pay, unless your contract stipulates redundancy payments.

If you are made redundant having been with the same company for more than two years, then you are entitled to a minimum statutory redundancy, as well as your notice pay and any other payments stipulated in your contract. You can use the government's redundancy calculator to work out what you might be entitled to.

I have grounds for a dispute regarding my redundancy – what should I do?

If you want to contest any aspect of your redundancy, it is important to act now. This is because you only have a limited time to pursue your case.

We provide you with clear, no-nonsense advice, and our expert employment solicitors always fight to protect your interests.

For an initial discussion, with absolutely no obligation just get in touch.

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