My Employment Rights

An employee can be fairly dismissed if their role is made redundant (see Unfair Dismissal for further information).

Meaning of Redundancy

A redundancy situation will arise if:

• The employer ceases to trade
• The employer has a reduced requirement for employees at a particular place
• The employer has a reduced requirement for employees of a particular kind

Redundancy Payment

If an employee is dismissed for reasons of redundancy, then they are entitled to receive a statutory redundancy payment, providing that they have at least 2 years' continuous service at the date of dismissal. To calculate your Current Statutory Redundancy Entitlement please follow the link.

Other Rights

If the employer offers a suitable alternative role to the employee, the right to a redundancy payment may be lost if the employee unreasonably refuses the role. A 4 week trial period applies in which the employee can try out the suitable alternative without losing their entitlement to a redundancy payment, should they consider within that period that the role is unsuitable.

Employees are also entitled to be paid for reasonable time off in which to seek work elsewhere.

If the employer fails to properly establish a redundancy dismissal, or acts fairly in the process it undertakes, the employee may be able to claim unfair dismissal.

Collective Consultation

Where an employer proposes dismissing 20 or more employees in a 90 day period at the same establishment, it is required to collectively consult with "appropriate representatives" of the employees who may be affected.

Where there is a recognised union that represents the affected employees, the union will be the appropriate representatives for those employees. If no union is recognised, the employees must elect representatives.

Consultation should commence in "good time" and should be at least 30 days (if 20-99 employees are being dismissed) or 90 days (if 100+ are being dismissed) before the date of the first dismissal.   

"Appropriate representatives" are entitled to paid time off to carry out their duties and receive training.

An employer must provide the "appropriate representatives" with the following in order to commence consultation:

• the reasons for the proposed redundancies;
• the numbers and jobs of those whom it is proposed to dismiss;
• the proposed method of selecting those to be dismissed;
• the method of carrying out the dismissals; and
• the method of calculating redundancy payments if this differs from the statutory scheme.

Collective consultation should be conducted with a view to reaching agreement on ways of:

• avoiding dismissals;
• reducing the number of dismissals; and
• mitigating the consequences of dismissal.

Failure to comply with these collective consultation obligations can lead to complaints to the employment tribunal. A tribunal can make an award of up to 90 days' pay in respect of each affected employee.

Individual Consultation

Redundancy is a potentially fair reason for dismissal. However, an employer must be able to demonstrate a genuine redundancy situation exists and that a fair selection and consultation process has been adopted.

Where people are being selected from a group, a fair selection process involves the use of objective selection criteria that are;

• relevant to the situation;
• reasonable;
• applied honestly;
• transparent and easy to understand;
• objectively measured.

The procedure that should be followed should include:

• commencement at an early stage, before a decision has been made;
• adequate information about the selection process and allowing the employee to respond;
• discussion of selection scores and giving the employee the chance to challenge them;
• discussing ways of avoiding redundancy
• consideration of alternative employment

Typically there will be a minimum of 3 meetings before a decision to dismiss is confirmed.

Alternative Employment

A key element of the consultation process is the obligation to consider offering suitable alternative employment to an employee at risk of redundancy.

What is suitable will depend on consideration of the comparison of the old role with the new, in terms of seniority, salary and location.

If an employee unreasonably refuses an offer of suitable alternative employment, they may lose their right to a redundancy payment. A trial period of 4 weeks is available to the employee to try out such new roles.

Complaints to The Employment Tribuna

If an employee is redundant, or believes that he is redundant, and does not receive a redundancy payment, he may make an application to the employment tribunal to determine the reason for his dismissal and an order for the employer to make the appropriate payment. Such a claim must be submitted within 6 months of the effective date of termination.