Redundancy

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Although it’s often used to describe somebody losing their job, redundancy has a specific legal meaning.

If an employee’s post has become redundant:

If the post is not genuinely redundant, or a fair procedure has not been carried out:

What is a genuine redundancy situation?

Under the Employment Rights Act 1996, “redundancy” occurs only in the following three circumstances:

Has a fair procedure been carried out?

Even in genuine redundancy situations, the employer must carry out a fair procedure that should involve:

Collective consultancy obligations

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.

How do redundancy payments work?

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.

Alternative employment – the facts

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:

What happens if an employee refuses an alternative employment offer?

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.

Alternatives to redundancy

Before starting redundancy proceedings, an employer may consider alternative cost-saving measures such as:

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To find out more about our Redundancy services, please contact Carol Shaw on 01295 204140 or email cshaw@se-law.co.uk

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