If an employee’s post has become redundant:
If the post is not genuinely redundant, or a fair procedure has not been carried out:
Under the Employment Rights Act 1996, “redundancy” occurs only in the following three circumstances:
Even in genuine redundancy situations, the employer must carry out a fair procedure that should involve:
If 20 or more employees are going to be made redundant within a 90-day period, the employer must:
The penalty for failing to inform and consult is potentially a tribunal award of 90 days’ pay for each redundant employee. Failure to provide the notification the the Secretary of State is a criminal offence.
If the employee has been employed for two years continuously, he or she will be entitled to a tax-free statutory redundancy payment. The amount depends on their age and length of time in employment, calculated as follows:
A week’s pay is calculated up to a weekly maximum wage which usually changes each year. The maximum amount of years calculated is 20.
An employer must consider suitable alternative employment for a redundant employee. Not doing so may make the dismissal unfair.
‘Suitable’ depends on the employee’s personal circumstances, and aspects like these should all be considered:
If the employer offers suitable employment and the employee unreasonably refuses to take it:
For employees, it is therefore important to determine if they are unreasonably refusing an offer.
Before starting redundancy proceedings, an employer may consider alternative cost-saving measures such as:
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