A redundancy situation arises when an employee is dismissed due to a reduction in the workforce. This can be as a result of the employer closing down its business, closing down a particular place of work, or simply requiring fewer people to carry out a particular type of work (often due to restructuring or modernisation of working practices).

Redundancy advice for you

Generally speaking, employees dismissed due to redundancy are entitled to a fair consultation and dismissal procedure (including notice and a right of appeal) and reasonable time off to search for alternative employment.

Additionally, employees’ with over 2 years’ continuous service will be entitled to a statutory redundancy payment (unless they have unreasonably refused suitable alternative employment and subject to some limited technical exclusions). A statutory redundancy payment is calculated using a fixed formula based on an employee’s age, pay and length of service.

Some employees may also be entitled to a contractual redundancy payment. Refusal to provide a statutory or contractual redundancy payment to an eligible employee will entitle the employee to pursue legal action against the employer.

Understanding unfair dismissal

Although redundancy is a potentially fair reason for dismissal, there are a number of ways in which a redundancy dismissal could be deemed unfair by an employment tribunal.

Examples of factors which could render a redundancy dismissal unfair include:

  • - A failure to consult the employee regarding the redundancy (the consultation must be genuine and not simply a means of communicating a decision which has already been made);
  • - A failure to consider alternatives to redundancy (such as reduced hours or alternative employment);
  • - Using an unfair selection criteria when selecting employees for redundancy (the selection criteria must be fair and objective);
  • - Relying on redundancy as the reason for dismissal when there is no genuine redundancy situation.

The exact requirements and timescale of a redundancy consultation and dismissal will depend on the numbers involved. Broadly speaking, the more employees being dismissed due to redundancy, the longer the consultation period required.

If you have been dismissed due to redundancy or are facing the prospect of a redundancy dismissal and would like advice on your rights, call Tallents now or email us.