Everything you need to know about Redundancy

Anyone faced with redundancy can experience feelings of uncertainty and stress, and not knowing what comes next can make it harder to understand the process. It’s important that you are aware of what your employer can and cannot do because if they don’t follow the rules, the situation can be made worse, and you may have a case that you can issue an employment tribunal claim.

We have put together answers to the most common questions our experts get asked and hope it will make things a little clearer about what to expect, your legal entitlements and what you should be aware of.

Redundancy has a specific meaning in employment law and may be used wrongly as an excuse to dismiss you.  Redundancy should mean that your employer no longer needs someone (or as many people), to do your job.  This could be because they are changing what they do, changing how they do it, changing location or closing down the business.  In a genuine redundancy, your job will usually no longer exist.

The process will depend on the number of redundancies being made across the whole of the business. If your employer is making fewer than 20 employees redundant over a 90-day period, the process will be different to a redundancy that involves over 20 employees, which is generally more complex. Here is an outline of the important parts to be aware of when going through the redundancy process:

• Employers must notify all affected employees that they have decided to make redundancies
• When selecting who is “at risk” of being made redundant, employers must carry out a fair system of selection (this can be grouping those in similar or the same roles in a “selection pool”)
• You should be notified which roles are at risk and how many redundancies are being considered and what the next steps are
• Employees should be offered alternative options (where available) such as alternative employment
• If your employer has proposed to make 20 or more employees redundant, they must conduct a collective consultation
• If your employer has proposed to make under 20 employees redundant, they must conduct individual consultations with all at risk employees
• During the consultation, your employer must listen to any ideas you have and consider these
• You are allowed to bring a colleague or trade union representative to the consultations

You should also be aware that it is against the law to select someone for redundancy because of a protected characteristic as this would be discrimination. Similarly, it is also against the law to select someone for redundancy because of any parental leave (maternity, paternity, adoption etc), for being an employee representative, for being a member of a trade union, because they are on a part-time or fixed term contract, based on working time regulations, or if it is because of whistleblowing concerns that the individual has previously raised.

For further information on how we can help with a discrimination claim against your employer, visit our dedicated webpage.

Statutory redundancy pay is payable for most employees who have been made redundant after working at the company for at least two years. The rates vary dependent on your age and length of employment. The amounts are calculated as follows:

• Up to the age of 22 you will receive half a week’s pay for each full year of employment
• After the age of 22 you will receive a week’s pay for each full year of employment
• After the age of 41 you will receive 1.5 weeks of pay for each full year of employment

Weekly pay is normally calculated by the average amount earned for the last 12 weeks of employment before you have received a redundancy notice.

However, it is also important to note that statutory redundancy pay is capped:

• Length of service is capped at 20 years
• Weekly pay is capped at £700
• Maximum amount that can be received is £21,000

If you believe you have not been paid the correct amount for being made redundant, you can use the Government Redundancy Pay Calculator to check your payment amounts.

Under normal circumstances, your employer is responsible for paying any statutory redundancy pay, as well as outstanding holiday pay. However, if the business closes, although you are still entitled to the redundancy payment, it may be the business cannot pay you, and if this is the case, you will need to contact the Redundancy Payments Service.

At Backhouse Solicitors we are experts in employment law and advising on redundancy.  We offer a free 30-minute appointment to discuss your case with you and to help you understand if you have been treated properly by your employer.

Tel:          01245 893400
Email:     info@backhouse-solicitors.co.uk
Visit:       17 Duke Street, Chelmsford, CM1 1JU
Or send us a message through the Contact Us page on this website.