Redundancy: a guide for employees

For most people, finding out that you are involved in a redundancy process is a scary moment. You’ll have lots of questions, probably some big worries, and it often feels like a big part of your life has been taken out of your control.

Every year, we advise a large number of individuals facing redundancy and so we thought it would be helpful to include some information here to help explain the legal aspects of the process, what rights you have, and what you can normally expect.

Of course, every situation is different, and to arrange to meet one of our senior, specialist lawyers to talk through your own circumstances you just need to give us a call on 0117 325 0526.

What is a redundancy?

A redundancy is technically a type of dismissal.  It happens because an employer’s need for employees performing a certain type of work (whether one role or many) has reduced or completely ended.  This might happen because a workplace has closed down altogether. Alternatively, there might be a drop off in work or a cost-cutting exercise which means that the workforce has to be scaled down. Or a re-organisation of part of a business may mean than one or two discrete roles are eliminated from the organisation, resulting in potential redundancies for those post-holders.

All these are examples of how a compulsory redundancy dismissal can occur.  There can also be voluntary redundancies, where employees volunteer to leave via a redundancy, usually in return for a decent redundancy package.

What money do I get?

If you have been in your job for at least two years, you are entitled to statutory redundancy pay. The exact amount depends on your age and length of service, based on figures that the Government increases every year.

You may also be entitled to additional (or ‘enhanced’) redundancy pay, which tends to be offered by some (mainly larger) private and public sector employers.

If you are not required to work out your whole notice period, you may receive payment in lieu of notice.

You should also receive pay for any holiday entitlement in the current year that you’ve earned but not yet taken.

Finally, you might be offered a payment over and above what you are strictly entitled to. Often, any extra payments will be conditional on you signing up to a Settlement Agreement.

Collective consultation

If your employer plans to make large-scale redundancies (20 or more within 90 days) it has to enter into collective consultation with either the recognised trade union(s) or elected employee representatives.  You may be asked to participate in an election and be given information through your representative before you have any idea as to whether you are likely to be made redundant yourself.

Individual consultation

If you are personally at risk of redundancy, then the employer is also obliged to consult with you individually.  (If there needs to be collective consultation too, then the collective stage takes place first.)

A redundancy process for an individual employee will normally involve several meetings. At first, you will probably be trying to digest the news that you may be redundant and you may not feel able to comment or challenge what you’re being told. The initial part of the individual consultation process is therefore mostly about the employer giving you information: why is there a need for redundancies? Why does it effect your position or department? Why have you been selected? It’s good to ask lots of questions at this stage, especially if the information you have been given seems limited.

If you have been placed in a selection pool with other employees performing the same (or similar) roles then you should be informed of the selection criteria that have been used, your own scores and the ‘cut off’ point for redundancy selection. You would not normally be entitled to scrutinise the scores of other employees.

Later meetings in the individual consultation process will give you the opportunity to put forward any arguments you have as to why your role should not be made redundant or why you should not have been selected. If your employer rejects these and decides to proceed with the redundancy, they should give you reasons for that decision.

In cases where the process reaches the final, dismissal stage, you will be invited to final meeting at which you have the right to be accompanied by a colleague or trade union representative if you wish.  Again you have the change to argue your case for why you should not be made redundant.  If you are unsuccessful and are made redundant at that stage, you have the right to appeal.

If your redundancy dismissal is confirmed at this final meeting, your notice period will then start.  Sometimes you may be offered a cash payment without being required to work through your notice (a payment in lieu of notice).  If you do remain at work, you are entitled to reasonable time off in connection with job-hunting, for example to attend an interview.

Is your employer playing fair?

If you have any doubt over the amount of redundancy payment you should get and the amount you have been offered then we can usually clarify this quickly and easily. However, some employees come to us because they don’t believe that their job is genuinely redundant, or think they have been unfairly treated.

Occasionally, an employer may try to ‘dress up’ a dismissal as a redundancy to avoid going down a more complicated process (such as performance management) or even to try to disguise a discriminatory or unlawful dismissal. In these circumstances you may have a claim for unfair dismissal or discrimination.

Even where the underlying reason for the dismissal is redundancy, your employer is obliged to follow a fair process and a failure to do so could mean you have a claim against them. In redundancy cases, a fair process will involve giving you adequate warning, engaging in genuine consultation with you, conducting an appropriate selection process and, finally, looking for an suitable alternative employment that might be available within the organisation.

If you win an unfair dismissal claim you will be awarded compensation, based largely on the loss of earnings you have suffered. That compensation is subject to a number of limits and caps.

If you believe you may have any sort of claim against your employer, it’s always important to act quickly, as the right to bring a claim can be lost if legal action is not taken within three months of the act you are complaining about (normally your dismissal).

We’re there for you

Being made redundant can be a daunting and very stressful situation.  We’re happy to help you through it, wherever there is a need for useful legal support.

So give us a call on 0117 325 0526 or get in touch and let’s discuss how we can help you.