Redundancy Rights

Being advised of redundancy is a big shock. You may feel that the redundancy is not genuine or that you have been unfairly selected.  Alternatively, you may accept that there is a genuine redundancy situation, that your employers have acted fairly but you simply want to check your entitlements or have been offered a compromise agreement. We summarise each of these issue below.

Is the redundancy genuine ?

The classic definition of redundancy is that a person’s place of work or the job that they do no longer exist. However, these broad issues are rarely more than the starting point for deciding whether redundancy is genuine. The employer has a duty to consult with employees on a redundancy situation, so it is in your interests, if you want to remain with the employer, to ensure that you put forward any alternatives to being made redundant, whether this may mean you undertaking another employee’s role, a part time role or any other reorganization. If the employer is moving the business, it should not be assumed that you would not relocate. At the very least this ought to be explored.

Be aware that whilst you have the right to be consulted, an Employment tribunal does not have the legal role of second guessing your employer’s decision to make redundancies ion circumstances which are not as clear cut as the definition above. For example, if your department is being downsized such that there are still jobs but not as many, the Employment Tribunal are not permitted to ask themselves what they would have done in the employer’s position. Subject to the employer complying with procedure, the question instead is whether the employer has acted within a “range of reasonable responses”. In other words, has the employer so obviously concocted a redundancy situation. If not, and the issue is marginal due to a temporary drop in business or such like, it will be unlikely that an employee will succeed in arguing unfair dismissal.

Fair selection for redundancy

As described above, the test for an employer is to have acted within a range of reasonable responses. This applies both to procedure in selection for redundancy and the ultimate selection. The employer should consult and should establish an objective set of criteria or scoring system to determine between a group of employees. “Last in first out” is often thought of as a good enough reason to choose one employee instead of another but it is unlikely that this would be sufficient. The key is generally common sense and applying a number of fair criteria. If your employer has not done this, has not consulted with you and given you warning of redundancy and right of appeal if selected, you may well have a claim for unfair dismissal by way of redundancy.

Redundancy entitlements

Compromise agreements are quite commonly offered with redundancy situations. We advise in more detail about compromise agreements on this page.

If you are not offered a compromise agreement, check your contract for your notice period entitlements. Your employer will need to comply with your contract and to pay this sum, whether or not you are required to work your notice period.

In terms of additional statutory entitlement, this is as follows :-

• You must have worked at the employer for at least 2 years
• You must be an employee within the relevant employment law definition

The amount of statutory redundancy pay you can get depends how long you’ve worked at the employer,    your age,   your weekly pay. You are entitled to 1/2 a week’s pay for each complete year of employment when you were below the age of 22,  a full week’s pay for each complete year of employment when you were between the age of 22-40 and  a week and a half’s pay for each year over 41 up to a maximum of 20 year’s service.

If your employer has offered you a suitable alternative position but you have refused this, you may lose your rights.