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Redundancy Rights

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Over the past five years within the U.K. there have been an unimaginable number of redundancies, leaving employees scared and confused about their rights. As the world economy starts to steady and we live in the hope that another recession isn’t just around the corner ClearSky-HR.co.uk have rounded up your redundancy rights, so you’re prepared should the unimaginable happen.

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What is redundancy?

Redundancy is a form of dismissal; however you are being dismissed because your job ceases to exist. This can happen for a number of reasons, mainly your company is downsizing due to restructuring or financial difficulties.

How are redundancies selected?

When being selected for redundancy your company must be fair and objective and they must tell you on which basis you are being made redundant. If you believe that your employer has selected you on the basis of gender, race, religion or sexual preference this could be a case for unfair dismissal.

Ways employers usually select employees for redundancy are:

  • Voluntary redundancy: employers can firstly ask which employees would like to offer themselves for redundancy
  • ‘last in, first out’: usually the last people to join a company are the first options for redundancy
  • Employment history: if there is a bad track record within the employees employment history this could count against him/her when the employer is considering redundancy options
  • Appraisals: Employers can call a meeting with all staff, review their skill sets, experience and qualifications
  • Re-applying: asking staff to reapply for their position can leave the employer with a clearer view as to who is most suitable for the role

If you think you have been selected for redundancy for any reason other than any of the above then this could be unfair dismissal and you may need to seek employment law advice from ClearSky.

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How much notice should I receive?

The amount of notice you receive from your company will depend on the length of time you have served for them. Your statutory notice periods are:

  • 1 month – 2 years: at least 1 weeks’ notice
  • 2 – 12 years: 1 weeks’ notice for ever year of employment
  • 12 years plus: 12 weeks’ notice

It should state within your contract how much redundancy notice your employer has allowed for, this can sometimes be more than the statutory standard, but cannot be less.

If your employer cannot give you notice they may offer you a pay-out as an alternative, this is referred to as payment in lieu. Payment in lieu is an additional payment on top of your standard redundancy pay.

Should I receive a pay-out as part of my redundancy package?

You should be entitled to redundancy pay if you have been the employee of the company for 2 years or more. Statutory requirements state that you shall receive:

  • For each full year you were under 22 – half a week’s pay
  • For each full year between the age of 22-41 – 1 week’s pay
  • For each full year you are 41 and above  – 1.5 week’s pay

If your employer offers you ‘suitable alternative employment’ and you refuse this without good reason then you may not be entitled to redundancy pay.

Does my employer have to have a consultation?

Yes, if you are being made redundant then your employer has to hold a consultation, either individually or collectively. Within the consultation your employer should cover:

  • Why you are being made redundant
  • Any alternative options to redundancy

If there are a number of employees being made redundant, the employer is required to hold a collective consultation, and either a trade union or elective employee representative must be present. The consultation time for employers will vary depending on the number of redundancies being made:

  • 20 to 99 redundancies: at least 30 days before
  • 100 plus redundancies: at least 45 days before

Does my employer have to offer me any alternative options?

Yes, if they have any ‘suitable alternative employment’ then your employer must offer you this; it could be within the same company or an associated company. If they have a suitable alternative and don’t offer this to you instead of redundancy it could be classed as unfair dismissal.

If you unreasonably refuse an offer on a suitable alternative position you may lose your statutory right to redundancy pay.

Whether a job is deemed suitable can depend on:

  • How similar the position is to your current position
  • The terms that the job is being offered on
  • Your abilities, skills and circumstances in relation to carrying out the job
  • The pay, hours, and location

Your employer must give the option of a 4 week trial period within the new position. If there is no suitable alternative position available then your employer must allow you reasonable time off to search for employment and arrange for training (to help when finding a new job.)

Whether you’re about to be made redundant, or are running your own company and have to consider redundancies for your staff it, can be difficult staying abreast the legalities. That’s why there are specialist companies, such as ClearSky Accounting, to assist with the paperwork and formalities.

Author Bio: Leah Jarratt is a regular guest writer for ClearSky Accounting, your HR expert.

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