Redundancy (collective and business reorganisations)

Dealing with redundancy can be daunting for both employers and employees: employers need to ensure that they follow correct procedures and apply them fairly. Employees have a number of rights in a redundancy situation and both parties need to understand what these are. Employees who are dismissed by reason of redundancy may be entitled to a statutory redundancy payment and they may be able to challenge the termination of their employment as an unfair dismissal. To fall within the statutory definition of "redundancy" set out in section 139(1) of the Employment Rights Act 1996 (ERA 1996), an employee's dismissal must be "wholly or mainly attributable to" the employer:

Ceasing or intending to cease to carry on the business for the purposes of which the employee was employed by it (business closure)
Ceasing or intending to cease to carry on that business in the place where the employee was so employed (workplace closure)
Having a reduced requirement for employees to carry out work of a particular kind or to do so at the place where the employee was employed to work (reduced requirement for employees)

Where 20 or more employees are being made redundant over a period of 90 days or less, an employer has a duty to:

Inform and consult appropriate employee representatives.
Notify the Secretary of State

A tribunal may award up to 90 days' pay in respect of each employee where there has been a failure to inform and consult. Whenever there is an obligation to consult collectively, the employer will also need to ensure that it has followed a fair procedure in relation to individuals, including consulting with them properly, so as to minimise claims for unfair dismissal.

When making redundancies following the correct procedure is crucial and we can offer straightforward advice to ensure that no mistakes are made which may lead to claims from those individuals departing your business.

If you require information or a consultation call us now on 0800 046 3065.

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Redundancy - collective and business reorganisations

Redundancy (collective and business reorganisations)