Redundancy can be an uncertain time for employees. It is important to have a clear understanding of the redundancy process and your rights as an employee.
What is Redundancy?
Redundancy occurs when the role of an employee is no longer necessary or available.
Genuine redundancy situations are those where the need for a particular role lessens or ceases, for example:
- Decline in business: When a business experiences a decline in its operations, the need for certain roles may decrease, leading to redundancies.
- Technological change: Introduction of new systems or technology that replaces the need for certain job roles.
- Restructuring and reorganisation: When an employer reorganises the business to improve efficiency, resulting in a reduction in the number of employees required.
- Business closure or relocation: If the employer ceases trading, closes down a specific location, or relocates the business to a different place.
Even if there is a genuine redundancy situation, employers must still follow a redundancy process to ensure fairness and compliance with employment laws. Failure to do so may result in an employee bring a successful unfair dismissal claim.
Non-Genuine Redundancy Situations
Non-genuine redundancy situations occur when an employer claims redundancy to cover other reasons for dismissal or to avoid following other procedures, such as performance management or disciplinary processes, for example:
- Personal conflicts: If the alleged redundancy situation arises as a result of a poor relationship between the employee and their line manager, it may indicate that the redundancy is not genuine.
- Performance-related dismissal: If there are issues with an employee’s performance, the alleged redundancy situation may be due to performance issues and an employer failing to address these issues rather than genuine redundancy.
- Discrimination-based dismissal: Dismissing an employee based on protected characteristics such as pregnancy, gender, ethnicity, disability, sexual orientation, or religion is considered discriminatory and not a genuine valid redundancy.
- Hiring plans: If an employer has recently hired or plans to hire new employees in the near future, it may indicate that the redundancy is not genuine.
- Selective redundancies: If an employee is the only one or one of a few being made redundant in a large company, it may raise questions about the genuineness authenticity of the redundancy.
If you are concerned about the real reason for your role being made redundant, we would recommend that you take legal advice as soon as possible as you may have a claim for unfair dismissal.
The Redundancy Process: An Overview
An employer must follow a redundancy process that involves a number of steps to ensure fairness and compliance with employment laws.
Consultation
When a redundancy situation has been identified, an employer must consult with affected employees, explaining the reasons for the redundancy and exploring alternatives, such as offering voluntary redundancy or providing opportunities for other suitable roles within the company.
Selection Criteria and Pool
Employers must establish fair and objective selection criteria to determine which employees may be at risk of redundancy. The selection criteria should be transparent, avoiding any form of discrimination based on protected characteristics.
The selection pool should include employees who carry out similar work or roles that are affected by the redundancy. This allows for a fair assessment of employees’ skills, qualifications, and performance within a comparable group.
Selection Process and Individual Meetings
Once the selection criteria and pool have been established, employers must undertake the selection process. Employers should assess employees against the agreed criteria and determine whether the employee is provisionally selected for redundancy.
Employers should then conduct individual meetings with affected employees to discuss their provisional selection, provide feedback, and explore any potential alternatives. These meetings allow employees to understand the reasons behind their potential redundancy and provide an opportunity for open communication.
Consultation and Appeals
Throughout the redundancy process, consultation should continue between employers and employees to address any concerns, provide additional information, and explore alternatives.
Employees have the right to appeal against their redundancy if they believe the process was unfair or if they have valid grounds for challenging the decision.
Your Rights During Redundancy
Employees have certain rights to protect them during a redundancy process. Some key rights include:
Statutory Redundancy Pay
Employees who have been working for their current employer for two years or more are entitled to statutory redundancy pay. The amount of statutory redundancy pay depends on factors such as age, length of service, and weekly pay.
Notice Period and Pay
Employees have the right to be paid for a notice period, based on their length of service (statutory notice) or their contractual notice period. During the notice period, employees are entitled to their usual pay and benefits.
Suitable Alternative Employment
Employers have a legal obligation to consider offering suitable alternative employment to employees at risk of redundancy. Suitable alternative employment may involve a different role within the same organisation or a role in a different location. Employees have the right to accept or reject such offers but refusing a suitable alternative without a valid reason may affect their entitlement to statutory redundancy pay.
Redundancy can be a challenging experience, but it is important to understand your rights so that you can navigate the redundancy process with confidence.
If you require further information or assistance regarding redundancy, a Settlement Agreement or any other employment law matters, please contact Chloe Baxter who is a Partner in our Employment Team.
