Redundancy Advice For Employers

Specialist employment law advice and guidance for employers of all sizes across the UK

Redundancy Advice for Employers | EPR Law | Specialist Employment Law Advice for Employers

Redundancies are most often associated with a downturn in the economy that results in a business shutting down completely. However, in reality most redundancies take place on a much smaller scale, ostensibly in response to a need to cut costs and/or to improve operational efficiency, such as when the introduction of new technology or the centralisation of a business function makes certain jobs surplus to requirements. Whatever the reason, before you decide to make one or more of your employees redundant it is always worth taking legal advice. 

Why would an employer need or want advice on redundancy? 

The primary reason for any employer taking legal advice prior to dismissing an employee on the grounds of redundancy is to minimise the risks of the employee bringing a claim in the employment tribunal for either unfair dismissal or possibly discrimination. 

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If you are considering a redundancy situation in your business always take professional legal advice before you act.

 

Get In Touch Today

If you have an existing problem or you feel that one is on the horizon don’t wait for it to happen, take control, get specialist legal advice today.

 

When does a redundancy situation arise?

Redundancy is the dismissal of an employee or employees where the dismissal is wholly or mainly attributable to one of the following situations: 

  1. The whole business disappears – in this scenario the employer ceases or intends to cease carrying on the business for which the employee was employed by the employer

OR 

  1. The business is moving to a new location – in this scenario the employer ceases or intends to cease carrying on that business in the place where the employee was so employed 

OR

  1. The needs of the business have changed – in this case fewer people are needed to carry out work of a particular kind either because of a downturn in business or because the skills needed to do the job have changed.
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When is a redundancy dismissal unfair?

All employees have the right not to be unfairly dismissed, if they have two or more years of continuous service with their employer or an associated employer. Even where an employer has a potentially fair reason for the employee’s dismissal such as in a redundancy situation or because of the employee’s conduct, they can still be liable for a claim for unfair dismissal if they do not act reasonably in carrying out that dismissal for that reason. Employers should ensure that any redundancies are carefully planned and can be explained. This may include:

  • identifying any possible mitigations, such as non-employment related cost reductions and ring-fencing any alternative vacancies through hiring freezes;
  • ensuring that the selection pools have been properly considered and are the selection criteria fair or can be justified;
  • do any potentially affected employees require additional consideration or legal adjustments to be made (for example in relation to an underlying disability or enhanced protection for those on maternity leave with regard to suitable alternative vacancies);
  • is there sufficient time to consult fairly;
  • how will the staff be supported throughout the process; and
  • having an appeals process to ensure any outcome is fair.  

Why is 2 years’ continuous service important?

In a redundancy situation there are two important reasons why a minimum of 2 years’ continuous service with the same or an associated employer is important. First, employees dismissed on the grounds of redundancy with a minimum of 2 years continuous service qualify for a statutory redundancy payment. Second, if the employer fails to follow a fair process, the employee can bring a claim for unfair dismissal in the employment tribunal. Please note that in practice employees who are within a week of their two years’ service and not already under notice will have continuity of service.

What is a fair redundancy process?

The redundancy process must be well planned, with properly drafted documentation and backed up by excellent record keeping. Despite these requirements employers can generally carry out the process quickly and efficiently. 

 

How can redundancy be an unfair dismissal?

In situations where an employee is dismissed on the grounds of redundancy, the dismissal is likely to be seen as unfair if the employer has failed to follow a fair process. Typical complaints from employees include:

  • They have not followed the agreed process!”
  • Unfair or prejudicial selection, “the assessment criteria are not fair or objective and/or my disability or my maternity leave has counted against me”;
  • The redundancy is a sham and is a cover for other performance issues or my boss just does not like me”;
  • Lack of meaningful consultation; “my employer has made up their mind and does not listen to any of my suggestions”;
  • Lack of consideration of alternatives “I have not been given details of any vacancies and there has been no discussion about retraining or my suggestions for taking a pay cut or moving to a  part time contract for the moment have not been responded to”.

Get In Touch Today

If you have an existing problem or you feel that one is on the horizon don’t wait for it to happen, take control, get specialist legal advice today.

 

If there is a redundancy situation who qualifies for a redundancy payment?

For an employee to qualify for a redundancy payment they must have a minimum of two years continuous service with the same or an associated employer. 

 

Collective Redundancy Situations

Where an employer anticipates dismissing 20 or more employees within a 90 day period there are additional and much more onerous obligations to inform and consult with appointed representatives. For advice on collective redundancies please click here

Employment Lawyers for Employers

EPR Law is a trusted advisor to companies, LLPs and partnerships at all stages of their development.  We have a thorough knowledge and understanding of how quickly workplace issues arise and if left unaddressed, they develop into disputes. We can anticipate what the other side is thinking and consequently we explain the strategic options available to you so you can plan accordingly.

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