Redundancy

Redundancy occurs where your dismissal is wholly or mainly attributable to the fact that your employer’s requirements for work of the particular kind you are employed to do has ceased or diminished, either temporarily or permanently.

If you are dismissed for this reason, or put on short-term working (receiving less than half pay) or are laid off for four weeks or more, you can claim a redundancy payment if you have worked for the minimum qualifying period, which is two years continuous employment.

The payment is based on your age, length of continuous service and weekly pay. You are entitled to one and a half weeks’ pay for each year of continuous employment when you are aged between 41 and 63 inclusive, one week's pay between the ages of 21 and 40 inclusive, and half a week’s pay for each other year.

Weekly pay does not include all your earnings. Voluntary overtime is excluded but regular commission and bonuses are included. The maximum weekly pay allowable for redundancy purposes is £270 (from 1 February 2004).

You lose your right to a redundancy payment if you turn down an offer made by your employer to re-engage you on a new contract if the offer is of suitable alternative employment (the kind of work which would be regarded as suitable for you) and you have unreasonably refused to take it. The unreasonableness is judged by what your own circumstances are and is a more generalised test of reasonableness.

Before you are made redundant, you have a right to claim a reasonable amount of time off with pay in order to look for work or to retrain. If you accept an offer of new employment with the same employer or one of its associates, you have the right to a four-week trial period during which time you can quit the job and be regarded as redundant so that you do not prejudice your rights by taking the job for a trial period.

If your employer disputes that there is a redundancy situation, for example, by claiming that there has simply been a reorganisation of the business without any lessening of the requirements for employees, or if you dispute the amount of money paid to you, you can make a claim to an Employment Tribunal.

You can also make a claim if you feel that you have been unfairly selected for redundancy or if the redundancy process has discriminated against you on the ground of your race, sex, sexual orientation, religion and/or disability.

If your employer is insolvent, you can make a claim for redundancy pay and other outstanding debts including notice and holiday pay to the Secretary of State for

Consultation

If an employer is ‘proposing’ to make at least 20 employees redundant within a period of 90 days or less, there is an obligation to consult employee representatives about a proposal to make any dismissal. This duty to consult does not arise where an employer is only ‘contemplating’ making redundancies.

There is a minimum consultation period: 30 days if 20 or more employees are to be dismissed, 90 days for 100 or more. Employee representatives are either trade union representatives or representatives appointed or elected by the employees. If a trade union is recognised in respect of affected employees, then the employer must consult the trade union representatives even where elected employee representatives in the workplace already exist.

If the union or any employee representative claims that there has been inadequate consultation or none at all, it can make a claim to an Employment Tribunal which can then make a protective award of compensation in favour of the employees who have been dismissed without the necessary consultation having taken place. The normal award is for the period that your employer has failed to consult unless there is a good reason for the failure due to particular circumstances.

Even where an employer proposes to make fewer than 20 employees redundant, it is part of a fair redundancy procedure that they are consulted.



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