Why is it important?
Redundancy – making people redundant – is costly and stressful for employers as well as employees. Employers, if you are concerned about costly tribunal cases and how you could be affected, contact us here >>>
What to consider?
The Most Important:
- It is the position not the work performance of an employee. You can´t make a person redundant because of poor performance without going through the disciplinary procedure.
- Redundancy is about the work requirements of the employer. If an employee is made redundant they can and often will bring a claim for unfair dismissal to a tribunal. The risk can be minimised by use of a well crafted and mutually agreed compromise agreement.
- Statutory dismissal pay is calculated the same way as the basic unfair dismissal award of a tribunal so if the dismissal is found to be unfair this part of the award will be cancelled out by the previously awarded redundancy pay.
- Minimum qualification period for statutory laying-off employees is 2 years continuous service it is one year for an unfair dismissal claim.
- From the 1st April 2015 the maximum amount of a week´s pay used when calculating dismissal pay is £475 per week, maximum award is £14,250.
- From February 1st 2012 the maximum redundancy award achievable by an employee over 61 with 20 years service is £13,500 the maximum tribunal award for unfair dismissal becomes £74,000. These numbers are revised annually and take effect in February of each year.
- Age discrimination is still alive and well when calculating dismissal pay, older employees are entitled by law to more.
- When dismissing someone by laying them off, you must follow the same procedure as dismissing a person for any other reason.
- An employee being dismissed by redundancy is entitled to notice or if his contract allows payment in lieu of notice.
- If there are more than 20 people involved in a programme special consultation rules apply.
Shown below are 10 further points to bear in mind when embarking on a such a programme:
- It is a criminal offence for an employer to fail to give written details of the redundancy pay calculation to the affected employee.
- If the employer is insolvent statutory redundancy pay can be claimed from the state by following a lengthy process
- You must tell the employee the process used to select him/her for redundancy and give him a chance to appeal otherwise the process will be automatically unfair at a tribunal.
- It is illegal to select part time workers ahead of full time employees for redundancy merely because they are part time.
- Employees are entitled to redundancy pay even if they are within 90 weeks of starting their pension.
- If a job held by a woman on maternity leave is made redundant then she must be given preference for any other suitable available vacancy at the employer.
- Civil servants but not local government employees are exempt from statutory redundancy procedures.
- When considering an unfair dismissal claim the tribunal must not substitute its views for those of an employer when considering if the dismissal was unfair; rather they must deliberate whether the selection was one that a reasonable employer acting reasonably would have made.
- If an employer provides enhanced redundancy pay it is unlawful age discrimination to pay those being made redundant an amount calculated solely with reference to length of service or to pay them a flat amount irrespective of service length. Rather they should follow the statutory award guidelines.
- If both 20 employees are being made redundant and the enterprise is closing the employer must consult on both the closure and the redundancies.
Contact me now here >>>for a free 30 minute consultation to learn how we can help you save money, time, resources and stress.