Jo Seery, Thompsons Solicitors’ employment rights specialist, looks at when a genuine redundancy situation arises, duties on employers and the rights of employees.
As we enter a new phase of the coronavirus pandemic, for some it also raises the prospect of being made redundant.
But what does this mean for you and how can your Union membership help?
What are my redundancy rights?
In general, employees who are made redundant have a right to:
- a statutory redundancy payment (for employees who have two years’ continuous service);
- be treated fairly in the redundancy process; and
- reasonable time off work to look for alternative employment.
How much is a redundancy payment?
An employee who has two years’ continuous service is entitled to a statutory redundancy payment which is calculated according to age, weekly pay (subject to a statutory cap - currently £538 per week) and the number of years of continuous employment.
The statutory formula is:
- one and a half weeks’ pay for each complete year of service for those aged 41 and over;
- one week’s pay for each complete year of service between the ages of 22 and 40 inclusive;
- half a week’s pay for each complete year of service below the age of 22.
In some cases an employee may also have a contractual right to an enhanced redundancy payment which has been negotiated by the Union.
When is there a genuine redundancy?
The law says there is only a genuine redundancy situation when:
- an employer closes the business or part of it;
- an employer closes the location at which the employee works;
- the employer’s need for employees to perform the work has diminished.
If the actual workload has not decreased, but fewer employees are needed to do it, for example, because of a reorganisation, this would be a redundancy situation too.
Redundancy may also be used by some employers as a veil for a dismissal which would otherwise amount to discrimination or victimisation, such as selecting trade union activists for redundancy. In each case, it is important to assess whether there is a redundancy situation, and if there is, whether the dismissal was caused by it.
What are the obligations on employers?
Employers must act reasonably and fairly. This includes:
- warning and consulting employees and the Union;
- applying fair selection criteria;
- considering suitable alternative employment.
If an employer is planning to dismiss 20 or more employees, they are also required to consult collectively under section 188 of the Trade Union and Labour Relations (Consolidation) Act 1992.
The employer must adopt a fair method of selecting those to be made redundant, which includes considering the pool of employees to whom selection criteria will be applied. Before making anyone redundant, employers are also required to consider whether there is suitable alternative employment for the employee. Whether an alternative job is suitable will depend on what the job as a whole entails, not just the tasks to be performed. The terms and conditions (especially hours and wages) and the responsibility and status of the job offered are also important in determining whether the job is suitable, as are the personal circumstances of the employee. A redundant employee who unreasonably refuses a suitable offer of alternative employment will lose their entitlement to a redundancy payment.
An employee who has two years’ continuous service may be able to claim that their dismissal is unfair if the employer failed to follow a fair selection procedure or consider a suitable alternative.
What about time off to look for another job?
Employees with two years’ service who are under notice of redundancy have the right to reasonable time off with pay during working hours either to look for work or to make arrangements for future training for employment. An employee must actually request the time off in order to be entitled to it.
An employee who is unreasonably refused time off during the notice period can bring a complaint in an employment tribunal.
I’m not sure what to do - can my Union help?
Yes. Your Union membership entitles you to free employment law advice from the NASUWT and Thompsons Solicitors.
For more information, call the Thompsons legal team on 0808 100 2221 or visit the NASUWT portal on Thompsons website.
The views and opinions in this article are those of Thompsons Solicitors and do not necessarily reflect the official policy or position of the NASUWT.