Redundancy

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If you have been placed at risk of redundancy, or have been made redundant, then Blacks Solicitors’ Employment Law team can help you.

Redundancy is a potentially fair reason for dismissal, so a claim brought before an Employment Tribunal in relation to a redundancy dismissal will usually be based on allegations that:

  • A redundancy situation didn’t exist
  • The employer has acted unreasonably in adopting a particular redundancy procedure
  • The employer has unfairly selected candidates for redundancy

The Employment Rights Act 1996 defines a redundancy situation as existing where:

  • The employer has ceased, or intends to cease, carrying on business for the purpose for which the employee was employed (cessation of business)
  • The employer has ceased, or intends to cease, to carry on that business in the place where the employee was so employed (changing place of work)
  • The employer’s requirement for employees to carry out work of a particular kind, or to do so in the place where the employee was so employed, has ceased or diminished or is expected to cease or diminish (surplus labour)

To prove a redundancy dismissal was fair, the employer must show that:

  • Redundancy was the true reason for the dismissal
  • The employer acted reasonably in dismissing the employee

If an employer fails to satisfy these requirements the following remedies can arise:

  • Breach of Contract
  • A Statutory Redundancy Payment
  • Compensation for unfair dismissal
  • A Basic Award (a week’s pay – capped at £508 from 6 April 2018 – for each complete year of continuous service). This will be off-set against any statutory redundancy payments already received

If more than 20 employees are affected by the potential redundancy situation, more complex rules in respect of “collective consultation” are triggered. You should always seek legal advice if you think that you are one of 20 or more employees affected by a redundancy proposal.

Redundancy Pay

If you are an employee who has been made redundant you may be entitled to receive a Statutory Redundancy Payment from your employer as well as your entitlement to Notice or Notice Pay.

To claim a Statutory Redundancy Payment you must be an employee (as opposed to, for example, a “worker”) and have at least two years’ continuous service with your employer. Currently, redundant employees are entitled to receive:

  • Half a week’s pay for each completed year of employment between the ages of 18 and 21
  • A week’s pay for each completed year of employment between the ages of 22 and 40
  • A week and a half’s pay for each completed year of employment over the age of 40

For the purposes of calculating your redundancy entitlement, a week’s pay is capped at £508 (from 6 April 2018). You can claim for a maximum of 20 years’ service.

 

If you aren’t sure how much redundancy pay you are entitled to, or have questions about your rights, please email or call Blacks’ Employment Law team today on 0113 207 0000 for a free no obligation discussion.