Are You Being Made Redundant?
24th March 2017
A redundancy situation is where there is: a business closure, a workplace closure or where there is a reduced need for workers to do a particular kind of work.
If you are being made redundant, you are entitled to notice of termination of employment but what other rights do you have?
If you have two years’ continuous employment
If you have two years’ continuous service or more with your employer, you will be entitled to a statutory redundancy payment and also have unfair dismissal rights. In this instance, your employer needs to show that there is a genuine redundancy situation (ie it is not a ruse to “move you on”) and it has followed a correct consultation/dismissal procedure. If this is not the case, you are likely to have an unfair dismissal claim.
If the redundancy situation is caused by a reduced need for employees to do work of a particular kind, there can often be issues of fairness about who gets to keep their job and who is made redundant.
A redundancy dismissal is likely to be an unfair dismissal unless the employer has:
- identified an appropriate pool of employees from which redundancies will be made
- consulted with individuals in the pool, including on matters such as selection criteria for redundancies
- applied objective selection criteria to those in the pool
- consulted with the employees selected on an individual basis before a decision is made to terminate employment on the grounds of redundancy. The consultation will include considering alternative employment (subject to a trial period). This will usually involve a few meetings with the selected employees.
If you have less than two years continuous employment
If you are being made redundant and have less than two years’ service, you will not usually be eligible to bring a claim for unfair dismissal on the grounds of redundancy or be entitled to a redundancy payment.
However, in certain instances, you don’t need two years’ continuous employment to be eligible to bring a claim for unfair dismissal. This would be the case if you are made redundant due to one of the automatically unfair reasons e.g. you had asserted a statutory right, such as the right to a statutory rest period.
Where there are 20 or more employees being made redundant at one establishment over a period of 90 days or less, there are specific duties about information and consultation, including minimum consultation periods. If an employer fails to carry out the required information and consultation, an award of compensation, known as a Protective Award can be made to you by an Employment Tribunal.
In some instances, the selection for redundancy is motivated by a discriminatory reason (e.g. sex, race, disability, age, sexual orientation, religion or belief, gender reassignment, marriage or civil partnership, pregnancy or maternity). You can bring a claim for discrimination without any period of continuous employment.
Some employers will offer Settlement Agreements before or during a redundancy process. A Settlement Agreement is an agreement between an employer and an employee in which the employee agrees not to pursue any employment claims in return for a financial package.
If you are offered a Settlement Agreement in a redundancy situation, your employer will usually pay you the monies which you would have received anyway eg redundancy payment and notice. In addition, your employer may also pay “a sweetener” in order for you to give up your claims. The “sweetener” may be additional monies or even the offer that notice is not worked and is paid without deduction of tax and N.I.
In addition to written terms about the settlement of claims and monies payable, the Settlement Agreement may also include other terms eg about the confidentiality of the Agreement.
Quite often, a reference would be included within the terms of the Settlement Agreement which your employer would agree to provide if a reference request is made by a future employer.
You would be required to take independent legal advice about the terms of the Settlement Agreement and it is usual for your employer to pay a contribution towards those legal costs.
If you are offered a Settlement Agreement, we will check whether you are being offered a good deal, taking into account your contractual entitlements and your potential claims. We can help you achieve an improved financial package in certain circumstances.
Once a valid Settlement Agreement has been signed, you will not be able to sue your employer for any claims referred to as settled in the Settlement Agreement.
If you would like to discuss a redundancy situation or you have been offered a Settlement Agreement, please contact our Employment Solicitor, Julia Woodhouse on 024 7653 1532 or email Julia.Woodhouse@bttj.com.
The above is not intended to provide advice.
About the author
Julia Woodhouse is an employment solicitor at Brindley Twist Tafft & James in Coventry. She has specialised in Employment Law since 2000 and is a trusted advisor to both employers and employees