Redundancy is the term to describe when an employee’s role is no longer needed in a company. Common triggers for redundancy include business restructuring, mergers, automation, a drop in demand, or insolvency. It is not defined as dismissal as it can only be in the case where the role that the employee is considered redundant ceases to exist and no one else can be hired for the role. This makes redundancy about the role rather than the individual.
Redundancy selection and consultation
When deciding which employees to be selected for redundancy, employers must choose based on objective attributes such as skill, experience and capabilities rather than protected characteristics such as age, sex, pregnancy or disability. Selecting an employee based on a protected characteristic is unlawful as it is seen as discrimination, as outlined in the Equality Act 2010, and can be considered as unfair dismissal in which the employee can raise a claim. Before making redundancies, employers are required to explore alternatives, such as changing working hours, offering voluntary redundancy, or redeployment. They should also conduct consultations in an attempt to explain why redundancies are necessary and how employees are selected.
Voluntary redundancy
Voluntary redundancy allows employees to choose to leave the company in exchange for financial compensation. This is a common offer that companies utilise to avoid selecting specific employees for redundancy and it gives employees some control over the terms under which they depart.
That said, all employees may be entitled top redundancy pay under the National Employment Standards if they have at least 12 months of continuous service and are covered by the national workplace relations system. If they have worked for one year, the amount can be around four weeks of pay whereas if they have worked for nine years, the amount can be up to 16 weeks of pay, with the first portion free from tax. Generally, small businesses, with fewer than 15 employees are excluded from this.
Additional rights
Employees may be offered suitable alternative roles if possible, rather than being made redundant however, if the employee refuses this offer and chooses redundancy, their redundancy pay can be affected. In cases where the employer goes out of business, employees are entitled to claim redundancy pay from the government as the employer would no longer be able to pay them. If employees believe that the redundancy process was unfair or discriminatory, they can appeal or take legal action.
Unfair redundancy
Unfair redundancy generally falls into two categories which are procedural unfairness and substantive unfairness. Procedural unfairness happens when an employer fails to follow the correct process to make the employee redundant, for example not consulting the employees, ignoring collective consultation rules for large scale redundancies or choosing based on unfair criteria. On the other hand, substantive unfairness is when an employer uses redundancy to dismiss an employee for an unrelated reason, such as discrimination based on protected characteristics.
If an employee feels that they have been unfairly made redundant, they can start by sending an appeal to their employer and explain why they feel as though their redundancy is unfair. If the appeal is unsuccessful, they can result Acas for early conciliation which is a mediation service which must be completed before taking legal action. If that too fails, the employee can make a claim to an employment tribunal. In general, you must have had 2 years of continuous service to claim to have been unfairly dismissed however in cases that involve reasons that are considered automatic unfair dismissal, there is no minimum time that the employee has had to serve under the employer.
If you require expert legal advice or support with any aspect of your matter, our experienced team of solicitors at Aston Bond are here to help. We are committed to providing clear, practical and tailored legal solutions to help you move forward with confidence. Contact our team today on 01753 486 777 or email info@astonbond.co.uk to discuss how we can assist
