Key notes on redundancy - the legal procedures to avert tribunal claims - Feb 2008
What is redundancy? Employees with 2 years’ continuous service will be entitled to redundancy pay if the employer terminates their employment for the following reasons:
- the employer has ceased, or intends to cease, to carry on the business for the purposes for which the employee was employed; or
- the employer has ceased , or intends to cease, to carry on the business in the place where the employee was employed; or
- the requirements of the business for employees to carry out work of a particular kind has ceased or diminished or are expected to cease or diminish; or
- the requirements of the business for the employees to carry out work of a particular kind, in the place where they were so employed, has ceased or diminished or are expected to cease or diminish.
Alternative work
Consideration must be given to any alternative jobs in the organisation, and any retraining requirements which might be necessary.
Minimum procedure
As a minimum, the statutory dismissal procedure must be applied:
- Step 1 - Write to the employee notifying them of the reason for the redundancy and invite them to a meeting to discuss the matter.
- Step 2 - Hold a meeting with the employee (at which the employee has the right to be accompanied) to discuss the redundancy. Notify the employee of the decision and the right to appeal.
- Step 3 - Hold an appeal meeting (if the employee wishes to appeal) at which the employee has the right to be accompanied, and inform the employee of the final decision.
Redundancy procedure
To avoid employment claims against the organisation, a more robust procedure is desirable and will normally contain the following elements:
- an introductory statement of intent towards maintaining job security, wherever practicable
- details of the consultation arrangements with any trade union, employee representatives and individual employees
- the measures for minimising or avoiding compulsory redundancies
- general guidance on the selection criteria to be used
- details of the severance terms
- details of any relocation expenses, details of any hardship or appeals procedures and
- the policy on helping redundant employees obtain training or search for alternative work.
Making 20 people redundant
If you propose to make 20 or more people redundant, then there are additional requirements to consult with appointed representatives and to give 30 or 90 days notice to the DTI.
Claims of unfair dismissal
Progressing a flawed procedure will give rise to claims for unfair dismissal and automatic unfair dismissal.
For more information on work practices contact Seth Lovis & Co employment department on 020 7240 9450 or enquiry@sethlovis.co.uk.