Overview of Your Employer's Obligations
The redundancy process is extremely tightly regulated. There are strict rules on how your employer should conduct the redundancy process at every stage. Violation of those rules can lead to legal action and compensation being awarded to the aggrieved employees.
Redundancy Selection and Consultation
If the redundancy involves more than 20 people, it is called a collective redundancy. Special conditions apply to collective redundancies. The employer must notify the government and must consult with employees or their representatives for specified lengths of time before the redundancies actually take place. These are 30 days if the redundancy affects between 20 and 99 workers in total and 90 days if the redundancy affects more than that.
Your employer is required to consult you about the upcoming redundancy. This means there should, at a minimum, be a private meeting in which the organisation’s managers speak to you individually. There may also be collective consultation.
If you are being made redundant, the employer is required to explain to you why the redundancy is occurring, and what the selection criteria were (if not all employees are being made redundant). These selection criteria must be objectively-based. That means they must be grounded in something concrete and measurable. It is not an acceptable practice for an employer to just pick out his least favourite employees for redundancy.
There should also be some form of appeal procedure for those who believe they have been wrongly selected for redundancy.
Alternatives to Redundancy
The employer is required to consider alternatives to redundancy, such as offering you comparable work elsewhere within the organisation, including within other affiliated companies if the company is part of a corporate group. When you accept an alternative job offer from your employer, you are entitled to a trial period of at least four weeks to help you decide if the new job is suitable. If you leave during this period, you are retain your rights to Statutory Redundancy Pay.
If you or your representatives suggest alternatives to redundancy yourselves, the employer is required to consider them.
Redundancy Payments
The employer is obligated to provide a lump sum payment to anyone with more than 2 years of continuous service. A minimum of how much this payment should be is prescribed by law and is based on the length of service, age and weekly pay of anyone affected by the redundancy. This minimum amount is called Statutory Redundancy Pay (SRP). It is possible that the employer, through the contract of employment, is obligated to provide more generous treatment than this. This is called non-statutory redundancy pay.
All employees being made redundant should be provided with a written statement explaining how much redundancy pay they are entitled to and how this was worked out.
Notice Period
The employer is required to provide a period of notice to all employees affected by the redundancy or pay in lieu of notice (PILON). This notice period should be one week for each year of continuous service with the company or organisation. If the employee has been with the organisation for more than one month but not yet a full year, he or she is still entitled to at least one week’s notice. This amount of notice is the statutory minimum. It is possible that your contract of employment provides for a longer notice period.
During the notice period, the employer is required to provide the employees who are due to be made redundant with “reasonable” time off at full pay to look for other work or to retrain.
If you leave to take a new job during the notice period, you may lose your right to Statutory Redundancy Pay.
Employer Obligations During Redundancy – Conclusion
The complexities of the law relating to redundancy can be confusing for all concerned. As violations of proper procedure can be punished with financial penalties, however, it is certainly worth researching the employer’s obligations in detail.
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