Redundancy Fact Sheet

Redundancy is a very stressful time for both employees and employers. Emotions can frequently run high. Bevans Solicitors Employment Team understand the need for clear, concise and practical advice and have produced this guide to Redundancy, which answers some frequently asked questions.

What is a Redundancy?

There is a precise definition of redundancy encompassing 3 elements. If this is not met but there is still a dismissal, there may be a claim for unfair dismissal.

Job Redundancy - job disappears

Place of work redundancy - place of work disappears

Requirements of that business for employees to carry out work of a particular kind, or for employees to carry out work of a particular kind in the place where the employee was employed by the employer, have ceased or diminished or are expected to cease or diminish.

What entitlement does an employee have when being made redundant?

Unless the employer has a separate redundancy scheme, where there is a genuine redundancy situation, an employee with at least 2 years continuous service is entitled to a redundancy payment from the employer. The amount of the payment depends upon the age, length of service and pay of the employee.

What must an employer do to effect a dismissal by reason of redundancy?

If a fair procedure is not followed, an employee with 1 years' continuous service may present a complaint for unfair dismissal. The maximum amount of compensation is £51,700. A COMPLAINT MUST BE PRESENTED TO THE EMPLOYMENT TRIBUNAL WITHIN 3 MONTHS FROM THE DATE OF DISMISSAL.

In order to follow a fair procedure employers should: -

Inform employees of the possible need for redundancies, giving as much advance warning as possible - it is important to stress that no final decision has been taken yet.

Consult with employees and the trade union before declaring redundancies as to

whether redundancies can be avoided or delayed

consideration of voluntary redundancy schemes

the pool from which redundancies are to be selected

the selection criteria to be used

the timetable involved

entitlement to a redundancy payment if declared

offering help to get new jobs

Draw up objective selection criteria

Apply the criteria fairly

Consider whether alternative employment is available (This obligation continues to the date of termination of employment)

Declare the redundancies - give proper notice of termination of employment

Consider...