It is an unfortunate fact that an employer may need to make employees redundant. Neither an employee nor an employer will want to find themselves in this position but if you do then it is important to understand the law surrounding redundancy and the procedures that should be followed.
We have set out below a few points that you should consider if you find yourself either being made redundant or making an employee redundant.
What is redundancy?
The first thing to think about is whether there is a genuine redundancy situation. There will be a redundancy situation if:
- the employer ceases carrying on the business in which the employee worked;
- the employer ceases carrying on the business in the place in which the employee worked; or
- the business needed fewer people carrying out work of the kind which the employee performed.
An employer must follow a proper and fair procedure when making an employee redundant. If the employer fails to do this, he could be vulnerable to a claim for unfair dismissal. A fair procedure generally involves identifying the group of employees from which the redundant employees will be selected. This is called the selection pool. Selecting the employee from the selection pool must be carried out in a fair way. This is done based on a fair and objective selection criteria e.g. based on experience and capability, consulting with the employee or taking into consideration if there is any alternative employment within the business for the employee or if there are any alternatives to redundancies
If more than 20 employees are being dismissed, there are additional statutory requirements that must be complied with.
Statutory Redundancy Pay
Employees with 2 years continuous employment or more are entitled to a statutory redundancy payment. This is calculated using a formula based on the employee’s age, pay (subject to a statutory maximum) and length of employment (subject to a maximum of 20 years).
If redundancy is not the genuine reason for the dismissal and is only used as a masquerade to cover for some other reason or if a fair procedure has not been followed then the employee may bring a claim in the Employment Tribunal for unfair dismissal.
Employees employed before 6 April 2012 must have been continuously employed for one year to make a claim for unfair dismissal. Employees employed on or after 6 April 2012 must have been continuously employed for two years to make a claim. There are however certain types of cases where a dismissal will be automatically unfair and no qualifying period is required, for example where the dismissal is due to discrimination.
For all the above reasons care must be taken when an employer is making an employee redundant otherwise it could result in a very expensive mistake for the employer. Our experienced employment team advise both employers and employees on all aspects of redundancy.
Employment Law Solicitors in East Sussex
We are highly qualified and experienced solicitors in East Sussex, based in Eastbourne, Polegate, Meads & Hailsham. If you would like any advice on your personal situation, regarding redundancy or unfair dismissal, then please contact us on:
Eastbourne 01323 727321
Hailsham 01323 841481
Polegate 01323 487051
Meads 01323 407577
We will maintain complete confidentiality and discretion at all times.