When selecting employees for redundancy, the employer must take into account the following points to make sure the selection process is fair.
The employee can only be made redundant if:
An employer must show proof that one of the above has arisen. It is important to remember that in a redundancy situation it is the job that is being made 'redundant' not the employee.
Redundancy will only be considered fair if:
Employers should make as much effort as possible to find suitable alternative employment for an employee facing redundancy.
The main statutory rights that an employee has on redundancy are:
If more than 20 people are being made redundant, the employer must consult with a trade union (if they recognise a trade union) or employees' representatives. The employer will have to inform the representatives of the number of employees being made redundant, the proposed method for selection of redundancy, timescales, and method of calculating redundancy pay etc.
The employer does not have to agree with or adopt any suggestions the representative may make. However they must still implement redundancies both fairly and in accordance with the correct procedures. It is also advisable to consult with the individuals that are going to be affected by the redundancies. If an employee is made redundant without such consultation, he or she may potentially make a claim for unfair dismissal even if the Trade Union or Employees' Representative(s) have been consulted.
Employers have a statutory duty to provide representatives with the following information in writing concerning proposals for redundancies so that they can play a constructive part in the consultation process:
Guidelines for consultations are:
Consultation should begin:
The employee's statutory entitlements are calculated with reference to:
Current entitlements to statutory redundancy pay apply to employees with a minimum of two years' service (time served before the age of 18 is not included). Current rates of statutory redundancy pay are:
For the purposes of redundancy a week's pay is currently capped at £643.00. The maximum statutory redundancy payment is currently £21,000.00.
In the event that the employee declines an offer to be kept on or declines a suitable alternative position that is offered he or she will lose the entitlement to redundancy pay.
N.B.
An employee who feels they were unfairly dismissed, or believes that there was an unfair selection process for the redundancies, may be entitled to an award equal to the redundancy payment plus compensation for unfair dismissal. In certain cases additional awards may be made against the employer.
If a redundancy is found to have resulted from discrimination because of the employee's sex or sexual orientation, race or religious belief, or disability the awards an employee can receive are without limit.