Expert advice for challenging times.
Firstly, a genuine redundancy situation must be identified, so the reason for making the redundancy must be ‘wholly or mainly attributed’ to closure (or intention of closure) of business, particular office or workplace or a reduced requirement for a particular type of work.
Should a genuine redundancy situation be identified, the employer will then need to consider carefully the number of employees affected and identify ’selection pools’ comprising of employees carrying out the same or similar roles and communicate this to affected employees as soon as possible.
Employers will usually have to go through consultation periods, meeting with affected employees to allow both parties to put forward suggestions to avoid redundancies.
Where 20 or more employees are affected over a 90 day period, there may be additional requirements to notify the Secretary of State and conduct both collective and individual consultations, with either trade union or elected employee representatives’ involvement.
Objective and fair selection criteria should be used to identify the employees provisionally selected for redundancy. Examples of appropriate criteria may be the standard of work, skills, qualification, experience, attendance and disciplinary records.
Employees can not be selected for redundancy because of a particular “protected characteristic”, such as their age or sex or because they work part-time. The Equality Act 2010 provides protection in relation to protected characteristics and further details can be found here.
If no alternative to redundancy can be found during the consultation, the employer will need to communicate this decision through a final meeting. It is also good practice to offer the employee the right to appeal.
Redundant employees are entitled to:
a. Notice pay
Notice must be given of the leaving date, which is subject to statutory minimum requirements based on length of service
The employer can also offer an immediate date with payment in lieu of notice or garden leave. If the employment contract gives a greater entitlement to notice, then this should be applied, or the employee may have a claim for breach of contract.
b. Statutory redundancy pay
Where an employee has worked for an employer for at least two continuous years, they will be entitled to statutory redundancy pay calculated at the following rate:
Each week’s pay is subject to a cap of £643 (April 2023) and Yyou can use the statutory redundancy pay calculator available on the gov.uk website here.
Employers also need to consider whether any contractual redundancy entitlements apply.
c. Accrued but untaken holiday pay
Employees are entitled to be paid in lieu of any accrued but untaken holiday outstanding as at the date their employment ends.
Redundancy is an unpleasant situation for all involved, and in order for a redundancy to be fair and genuine, all reasonable alternatives have to be considered. Employers can consider the following:
Clients tell us how we deliver peace of mind.