The need for redundancies is likely to arise in any business from time to time. Redundancy situations must be handled carefully, and a fair procedure should be followed to minimise the risks of employment claims, such as unfair dismissal, discrimination or victimisation.
A redundancy situation can arise where a workplace is closing or moving, or that the company is ceasing trading altogether. It can also arise where the business has a reduced need for employees to carry out a particular kind of work.
Our employment team can offer guidance and advise regardless of what stage the redundancy process is at including advising on the nature of the redundancy exercise, whether it gives rise to a collective redundancy exercise, identifying the affected employees and the redundancy procedure itself.
A fair redundancy procedure is likely to include the following:
- Consideration as to whether it is possible to avoid the need for redundancies e.g. by restricting recruitment, considering alternative employment, voluntary redundancy, or restricting overtime.
- A correct pool of employees from whom the redundancies will be chosen.
- Consultation with employees over a reasonable period of time discussing ways of avoiding redundancy.
- Selection criteria must be objective rather than subjective.
- Select based on fair application and marking of the criteria.
- Any suitable alternative employment for potentially redundant employees should be considered
- The right of appeal.
Employees have the right to be accompanied (by a trade union representative or colleague) at any meeting which may lead to their dismissal.
Employees with at least two years’ continuous employment are entitled to a statutory redundancy payment (SRP) if dismissed by reason of redundancy. An employee will receive
- half a week’s pay for each full year under the age of 22
- one week’s pay for each full year between 22 but under 41
- one and half week’s pay for each full year over the age of 41
Length of service is capped at 20 years.
If an employee is made redundant on or after 6 April 2021, their weekly pay is capped at £544. The maximum statutory redundancy pay is currently £16,320.00.
You can calculate an employee’s statutory redundancy payment here.
