Facing redundancy can be a daunting and stressful prospect for employees. In order to assist you with the process and what to expect, here are the answers to some of our most frequently asked questions:
IN WHAT SITUATION MIGHT I BE MADE REDUNDANT?
A genuine redundancy occurs in three situations:
- Where a business closes down completely
- Where the place of work closes down
- Where the employer requires fewer employees to carry out work of a particular kind.
HOW SHOULD MY EMPLOYER CONSULT WITH ME BEFORE MAKING REDUNDANCIES?
Your employer should consult with the workforce about the possibilities of redundancies as early as possible, depending on how many redundancies are proposed. In addition, employers should consult employees who are affected by any proposed redundancy individually. Consultation should involve your employer explaining how and why redundancies have arisen and looking at ways in which they can be avoided or minimised. Your employer should also consider any alternatives to redundancy, such as working reduced hours or taking a pay cut and whether there are any suitable alternative roles you could undertake instead. Throughout the consultation process, you should be given the opportunity to ask questions and make suggestions about how your redundancy might be avoided.
HOW WILL I BE SELECTED FOR REDUNDANCY?
Your employer must follow a fair and reasonable process in selecting people for redundancy. This includes using a fair and objective way of selecting who is going to be made redundant and explaining to employees what this is. Fair and objective selection criteria may include skills, qualifications, experience and disciplinary records. An employee cannot be selected for redundancy for a discriminatory reason (i.e. age, sex, religion, gender, race, disability, pregnancy) or automatically unfair reason (i.e. for a health and safety reason or reporting your employer for a criminal offence). You should be given the opportunity to comment on your individual results in any scoring exercise.
WHAT IF MY EMPLOYER OFFERS ME A DIFFERENT JOB AS AN ALTERNATIVE TO REDUNDANCY?
If you are offered a ‘suitable alternative role’ you will need to think carefully before deciding whether to accept or reject a role. If you unreasonably reject a role which your employer considers to be a suitable alternative, you may lose your right to a redundancy payment. You have the right to a four-week trial period in any potential alternative role before you make a decision.
WHAT PAYMENTS AM I ENTITLED TO ON REDUNDANCY?
You will be eligible for redundancy pay if you are an employee and you have worked continuously for your employer for at least two years. The factors used to determine how much redundancy pay you are entitled to include your age, your length of service and your earnings. Statutory redundancy pay is calculated as follows:
- Half a week’s pay for each year of employment up to the age of 22
- One week’s pay for each year of employment between the ages of 22 and 40
- One and a half week’s pay for each year of employment over the age of 41.
There is a cap of £17,130 on statutory redundancy pay regardless of your salary and length of service.
This is the minimum statutory redundancy pay you are entitled to. Your employer may offer a more generous scheme so make sure you check your contract of employment and company handbook.
As well as redundancy pay, you are entitled to be paid your usual salary up until the termination date, notice pay and a payment for accrued but untaken holiday.
MIGHT I HAVE A REDUNDANCY CLAIM AGAINST MY EMPLOYER?
If you are an employee with over two years’ service with your employer, you have significant employment protection. You may have a claim against your employer if there is not a genuine redundancy situation, if you have been unfairly selected for redundancy or if your employer has not followed a fair and reasonable process.
For more information on redundancy and how we can help you, please contact our Employment Team on 0345 646 0406 or fill in our online enquiry form and a member of our Team will be in touch.