Updated 1 July 2020
It can be daunting to be told you are at risk of redundancy. In such circumstances, it is helpful to understand what your rights are, as well as, your employer’s obligations towards you.
Redundancy can be a lawful reason to terminate someone’s employment. However, just because an employee is told they are being made redundant, does not mean that a dismissal resulting will be automatically lawful. You may be able to bring a claim against your employer if you are unfairly selected for redundancy, your selection is discriminatory or your employer has failed to follow a fair procedure.
You will need to have been employed, by the company, for two years to bring a claim for unfair dismissal. However, you do not need two years’ service if your dismissal is discriminatory. If you wish to challenge a redundancy you should seek advice immediately, as there are very strict deadlines
What is Redundancy?
A redundancy situation can arise in one of three ways:
- The requirement to do the type of work you do has diminished;
- The employer’s business ceases to operate; or
- The place of work moves to a different location.
In order to lawfully dismiss for redundancy, there must be a genuine redundancy situation and the employer must follow a fair procedure.
How can an employer prove genuine redundancy situation?
Employers may assert that they need to reduce headcount due to a reduction in a particular type of work. If you are selected for redundancy in such circumstances but do not believe the work you do has decreased, you should also consider whether any of the following apply:
- Has your employer recently recruited staff to your team, or has indicated it intends to in the near future;
- Has your employer, recently, been criticising your performance;
- You are the only one at risk of redundancy;
- Are you pregnant/on maternity leave; or
- Is there anything to suggest that your selection for redundancy is due to your age, gender, sexual orientation, gender reassignment, disability, race, religious or philosophical beliefs, marriage or civil partnership status.
Has your employer followed the correct process?
Once the employer has established there is a genuine redundancy situation, it must go on to show that the employee was fairly selected for redundancy.
This can include being able to show the following:
- The employer has drawn up a selection criteria, which is fair and objective;
- Those at risk were given an opportunity to comment on the proposed selection criteria;
- The criteria have been applied fairly to all those at risk of redundancy;
- Employees were given adequate warning and properly consulted before the redundancy was confirmed;
- The employer considered ways to avoid redundancy, such as whether there are any suitable alternative roles within the business or group business.
Also, any selection criteria which is directly or indirectly discriminatory will undermine the fairness of the dismissal.
Has your employer consulted you?
Those at risk of redundancy must be informed in writing and consulted by the employer as soon as possible. Crucial to the consultation process is discussing with the employee why the redundancy is necessary and exploring ways to avoid it.
It is the employee’s opportunity to ask questions and gather information.
If 20 or more employees are being made redundant over a period of 90 days or less, Collective Consultation must take place – this imposes additional obligations on the employer. Including, a requirement to consult with a recognised trade union. If there is no recognised trade union, the employer must consult with employee representative(s) before issuing the redundancy notice.
Did your employer try to find you suitable alternative employment?
The employer has a legal duty to consider whether there are suitable roles which at risk employees could undertake. The suitable alternative role does not have to be in the same location. An offer of alternative employment should be made before the current job ends.
The employee should be offered a trial period in the new job, this will allow them to determine whether they’re suited to the role. If not, they can reject the role, within the trial period without jeopardising her entitlement to redundancy pay.
Has your employer provided you with redundancy pay?
Employees who have two years continue service will be entitled to a minimum statutory redundancy payment. Employees may also have a right to enhanced, contractual redundancy payment.
If your redundancy is confirmed, ensure that you obtain independent legal advice prior to signing any settlement agreement, as in signing the agreement you will be waiving your rights to bring a claim against your employer. Before you waive your rights, it’s important to check whether you are being adequately compensated for the rights you are giving up.
Redundancy during the COVID-19 pandemic
As we enter a period of economic turbulence caused by the Coronavirus outbreak, many employees may question their job security. In order to support employers and employees alike, the government have rolled out unprecedented measures to avoid redundancies by partially covering the wages of workers who would otherwise have been laid off. This is known as the Coronavirus Job Retention Scheme.
Initially, under this scheme employees were kept on their employer’s payroll and were entitled to receive 80% of their wage for all employment costs, up to £2,500 a month. Employers can choose to top this up by paying the remaining 20%, but they are not obliged to do so. Employees are not allowed to undertake any work the businesses during this period.
However, since the introduction of the Coronavirus Job Retention Scheme in March 2020 there have been many changes to it. The government announced an extension to the furlough scheme through until 31 October 2020 and from the 1 July there is further flexibility allowed such as employers being able to bring furloughed employees back to work on a part time or reduced hours basis. We have outlined this in further detail in this blog.
Whilst we are currently in uncharted waters due to COVID-19, employers must still adhere to the employment laws of the United Kingdom. At Hodge Jones & Allen, we will continue to fight for your rights and ensure you’re treated fairly. To speak with one of our experienced employment solicitors in London, call us today on 0808 252 5231.