Redundancy

Redundancy is a particular type of dismissal from employment.

 

Legally speaking a redundancy dismissal is one that occurs when the employer reduces their need for employees either in general, in a particular role or at a particular location from which they operate.

 

Employers sometimes use the term 'redundancy' to describe a dismissal in different circumstances e.g. where they are dismissing the employee for performance reasons.  This will not be a redundancy so far as the law is concerned and will be treated as a normal dismissal.

 

Redundancy payments

A key reason for identifying that a redundancy situation has led to the dismissal is that this will trigger a right to a statutory redundancy payment where an employee has worked for more than two years.  Some employees may have other rights arising on redundancy under their contract. See:

Right to a redundancy payment

 

Alternative employment and trial periods

In some situations employers will offer alternative employment rather than redundancy.  This can operate to stop the employee receiving a redundancy payment of the offer is suitable and unreasonably refused.  Where other work is offered an employee may be entitled to a trial period before they decide to accept it.  See:

Offers of alternative employment

Trial periods

 

Redundancy as a fair reason for dismissal

The law on unfair dismissal recognises redundancy as one of the potentially fair reasons for dismissal.  If the employer can rely on a genuine redundancy situation as the reason for dismissal then it will be up to the employee to show the dismissal was unfair in another way if they are to suceed in a claim for unfair dismissal.  See:

Unfair dismissal

 

'Unfair' redundancy dismissals

It is possible to show that a redundancy is an unfair dismissal.  As referred to above redundancy is only a 'potentially' fair reason for the employer to dismiss an employee.  They will also have to show that it was fair in all the other circumstances of the case to dismiss the employee.  Challenges can be made on the extent of the consultations about redundancy, offers of alternative work or the way the redundancy selection process was carried out e.g. the fairness of the scoring system used to choose redundant employees.  See:

Unfair dismissal and redundancy

 

Large scale redundancies

Where more than 20 employees are made redundant at the same time by the employer there is a statutory duty on the employer to consult with the employees affected.  If this duty is not met then and Employment Tribunal can award a type of compensation called a 'protective award'.  See:

Redundancy and protective awards

 

 

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Zero increases by 26%

The Office for National Statistics has released new figures that show nearly 700,000 people work on zero hours contracts - up 26% from last year.  The problems caused by these contracts will require a significant change in the law.

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