Redundancy and fairness
When selecting employees for redundancy, the decision, and the process which informs it, must be fair. What is or is not fair is based on an assessment of the needs of the business. Again, failure to observe this procedure may give rise to a claim for unfair dismissal.
During the redundancy process, an employer may take into account the skills and work history of the employees in the frame for redundancy with particular focus on:
- The employee’s disciplinary record
- The employee’s experience in the role
- The employee’s skills and competencies
- The employee’s ability in the role
On the flipside, an employer cannot take into account any personal characteristics in making their decision.
These include:
- Age
- Sexual orientation
- Gender
- Religious belief
- Disability
- Working pattern (e.g. part-time employees)
- Race
- Membership of a Trade Union.
If the decision is based on any of these factors then the dismissal is automatically unfair.
Notice and redundancy
Employees are entitled to notice if they are to be made redundant. The periods are as follows:
- One week notice for employment of a period longer than one month, but less than two years.
- One additional week for every year between 2-12 years
- 12 weeks if the employee has been employed for more than 12 years.
In some situations, your employer may choose to give payment in lieu of notice.
This payment should at least match the pay you would receive during the notice period.
Redundancy Pay
It may be trite, but it’s true to say that a person is not made redundant per se; it is the role which is no longer required. In some cases, employees are entitled to financial compensation if their role is no longer required. This is known as redundancy pay and falls into two categories: statutory redundancy pay and contractual redundancy pay.
Redundancy pay is calculated based upon your age, your weekly earnings (up to a limit) and how long you have been employed. Some employers may offer more generous packages in some situations.
Qualification for Statutory Redundancy Pay
To qualify for statutory redundancy in the UK, the employee must have worked for the same employer for a period of at least two calendar years since turning sixteen years of age.
Those on short-term contracts may not qualify, although some freelance and agency employees may.
Statutory redundancy pay can be forfeited in some cases. If the employee refuses a suitable alternative job offer or leaves to take up alternative employment before the date of redundancy, then that employee may forfeit their redundancy pay.
Contractual Redundancy Pay
Some employment contracts may set out the amount of compensation which is payable in the event of redundancy. Employees should check their contract to determine whether or not contractual redundancy pay is included. Employers should take legal advice when drawing up contracts of employment.
Payment of Redundancy Pay & Claiming Redundancy Pay
Employers are obliged to provide employees with written breakdowns of how their redundancy pay has been calculated. Payment should be made on or shortly after the date at which the employment ends.
As an employee, you should not have to raise a claim for payment of redundancy pay – it should be paid automatically. If you are entitled to redundancy pay and you have not been paid within a reasonable time, you should write to your employer within 6 months of the date your employment ends (note that you should write within 3 months if you intend to raise another conjoined claim, such as for unfair dismissal). If an employer is refusing to pay, or has not paid, your redundancy pay, contact Lewis Nedas Law immediately.
Frequently Asked Questions
1. What is redundancy in UK employment law?
Redundancy arises when your role is no longer required by your employer, usually due to business closure, workplace closure, or reduced need for employees.
2. What are my rights during a redundancy consultation?
You have the right to a fair consultation. Your employer must explain the reasons, discuss your selection, and consider alternatives before making a final decision.
3. When is a redundancy considered unfair?
A redundancy may be unfair if there is no proper consultation, unfair selection criteria, or discrimination based on protected characteristics.
4. How is redundancy pay calculated in the UK?
Statutory redundancy pay is based on your age, length of service, and weekly pay (subject to a statutory cap).
5. Am I entitled to redundancy pay?
You usually qualify if you have worked continuously for your employer for at least two years. Some exceptions apply depending on your contract and status.
6. Can my employer select me for redundancy unfairly?
No. Selection must be fair and based on objective criteria such as skills, performance, and experience, not personal characteristics.
7. What notice am I entitled to if I am made redundant?
You are entitled to at least one week’s notice after one month’s service, increasing with length of service up to a maximum of 12 weeks.
8. What should I do if my employer does not pay redundancy pay?
You should contact your employer first. If unpaid, you may bring a claim. Legal advice can help you recover what you are owed.
