Redundancy Factsheet

Colin Foote, Director - Employment & Equality Law

Redundancy can affect anyone at any time in their career and can be a very upsetting process to go through. Understanding exactly what should happen and making sure that the correct process is followed can help you to remain in control.

Redundancy is used normally when a company needs to cut the number of employees. This could be for a number of reasons, from becoming less financially viable to moving operations to another site. Whatever the reasons, there are a number of rights that redundancy attracts and you have to be offered the following options by your employer.

They are:

• A consultation period about the redundancy
• A notice period
• The offer of an alternative position
• Time off to find a new job
• Redundancy pay

In addition to these rights, your employer must select using criteria that are fair.

This means that they should use selection criteria such as:

• Asking for volunteers
• Reviewing disciplinary records of all staff
• Selecting those with the shortest length of service
• Reviewing skills and experience
• Reviewing appraisals

Your employer cannot select on any protected characteristics, which include sexual orientation, disability or gender. This would be classed as unfair dismissal. The only time your employer can make redundancies without using a selection process at all is when they are completely closing down a whole operation or if you are the only employee in that part of the business.

Your employer must give you a notice period and this will change depending on your length of service. You normally get a week’s notice if you have been employed for less than two years and then one week’s notice for every year you have been employed up to 12 years and then 12 weeks’ notice for 12 years and over. This is usually paid in lieu with your redundancy pay or you will stay employed until your time is up.

There should be an opportunity for you to be offered an alternative role if there is one available. If this is not offered, then your employer could be accused of unfair dismissal. Check out your options with your employer, but the job must be similar to your current role.

You will only be eligible for statutory redundancy pay if you have been employed for two or more years. In addition, your age will also dictate how much you are paid.

You will receive:

• Half a week’s pay for every year you were under 22
• One week’s pay for every year you were between 22 and 41
• One and a half week’s pay for every year you were over 41

Your length of service has a cap of 20 years, but your redundancy pay is not taxable and you may get enhanced payments if your employer pays more than the statutory payments. Your contract will outline these benefits.

For more information about this article or any aspect of our employment and equality law solutions, please give Colin Foote a call on +44(0)28 9077 4500 (Ext. 204)