FAQ on Redundancy For Employees

 

Settlement Agreements & Redundancy

Frequently Asked Questions

 

 

1. As An Employee, In What Circumstances Can I be Made Redundant?

An employer may only make you redundant, if the employer has genuine reasons for terminating your employment. You should only be made redundant if there is a genuine redundancy, otherwise you may be able to claim for unfair and/or wrongful dismissal. Redundancy typically involves either temporary or permanent closure of a business as a whole or closure of a particular workplace where you are employed. Additionally, you should note that redundancy can involve a legitimate reduction in the size of the workforce.

 

 

2.  What Are My Employer’s Responsibilities When Contemplating Making Me Redundant?

There are a number of key guidelines that an employer must adhere to when contemplating making you redundant:

 

 

Planning

Employers are under an obligation to draw up a plan to decide which employees would be kept on or made redundant. The plan should include the selection criteria, namely detail reasons for those being kept on or made redundant.

Employers must inform you, if you are at risk of redundancy, of the impending redundancy as soon as possible to ensure that you have a chance to suggest alternatives to redundancy, apply for other jobs with the employer (where available) or apply for new jobs with other employers.

Employers should consider any proposals that you or your representatives make as an

alternative to redundancy.

Employers should decide as soon as possible how many employees would actually be made redundant.

 

 

Consultation

Employers should note that in the event that 20 or more employees are to be made redundant, the employer has a duty to consult with your representatives, including any relevant trade unions.

Employers must discuss alternatives to redundancy as well as the applied selection criteria for the redundancies..

 

 

3. How Should My Employer Implement the Selection Procedure?

With regards to the selection procedure, you should note the following:

• If you or a group of employees are selected for redundancy the employer must show in particular why the demand for your work has decreased or stopped completely.

 

•  If the amount of work has decreased so that only you or some of the employees within the group are selected, the employer must show how you or those employees were chosen over the employees that remain.

 

• The employer must show in detail a fair selection process. This can range from a “last in first out” approach to a scoring system where the employer gives points for certain job skills.

 

• The selection criteria should not be based upon an individual’s view of you or each employee, for example, what the personnel manager thinks of you personally.

 

•  Once the criteria have been agreed it should be adhered to rigidly.

 

•  Wherever possible (although not strictly necessary if the number of employees selected is below 20), the employer should attempt to agree the selection criteria with the trade union or your representative.

 

•  It is important to note that the selection procedure cannot be based upon unfair reasons such as union membership or activity. If the selection criteria are based upon race, disability, age or sex, then it is likely that you could claim for unfair dismissal under the relevant discrimination laws.

 

• The selection criteria the employer adopts should be part of its written procedures. They must be objective and applied consistently so that you are not unfairly selected. Furthermore, the employer must be careful to avoid any discrimination. Included in the variety of criteria that can be used to select you for redundancy are:

o      Skills, qualifications and aptitude. These can help keep a balanced workforce;

o        Standard of work performance. With this method, employers need to provide supporting objective                     evidence, for example from the organisation’s appraisal system;

o        Adaptability. It may be important for the employer’s business that you accept different types of work as              needs change. It should however be ensured that the basis for assessment does not discriminate.

o        Attendance/disciplinary record. The employer must apply this method consistently, and ensure its                  records are accurate and that the employer understands the reasons for absences. For example,                       employers must not include absences for maternity, paternity or adoption leave.

 

•  Employers should note that certain selection criteria are automatically unfair. The automatically unfair selection criteria include:

o        Trade union membership, non-membership or activity;

o        Legal industrial action lasting up to eight weeks, or longer;

o        Certain employees representative reasons;

o        Reasons associated with pregnancy, maternity, paternity, adoption and parental leave;

o        Actions taken on specified health and safety grounds; or

o        Reasons relating to regulations on part-time workers.

 

 

4. If My Employer Is In A Position To Offer Alternative Jobs, Is My Employer Allowed To Do So?

If an employer is considering making you redundant, the employer should offer you an alternative job or reducing your hours instead of making you redundant (provided such positions are available) or furlough (see below). You have a choice whether to accept the alternative job or not. It should be noted however that if you unreasonably refuse the offer, the employer may not be obligated to pay you the statutory redundancy pay. The employer may offer you a job identical to your current job or a job with similar skills. The job must have similar pay, conditions and skill requirements.

 

 

5. Furlough during Coronavirus Pandemic

The furlough of staff - The UK government’s Coronavirus Job Retention Scheme allows employers who are unable to maintain their current workforce to furlough employees and apply for a grant to cover 80% of their usual monthly wage costs, up to £2,500 a month.  

 

 

6. What would Happen If I Refuse To Accept The Offer Of An Alternative Job?

Any refusal of an offer of alternative is looked at from each employee’s perspective. You may or may not accept such an offer depending on your own personal circumstances. You and the employer are allowed to agree longer trial periods than 4 weeks, if deemed necessary. The 4 week period is merely the minimum period.

 

 

7. Can the Employer Claim Restructuring Of The Business or rely on the financial impact of the Coronavirus Pandemic As the Reasons For Making its Employees Redundant?

It is important to note that your employer may claim restructuring financial impact of the Coronavirus Pandemic as the reasons for the redundancy, in order to avoid making a redundancy payment. The employer may legitimately dismiss you if you do not accept a change in your terms and conditions resulting from a reorganisation. If the employer can show such changes are necessary to the continued management and efficiency of the business, and you refuse to adhere to those terms and conditions, your dismissal would be justified. It would be sufficient for the employer to show the reorganisation is for sound business reasons, which require a change in your terms and conditions of employment.

 

 

8. What Could Happen If the Redundancy Is Not Carried Out Fairly?

Employers should take certain steps to ensure that the contemplated redundancy is carried out fairly. In the event that the redundancy is not carried out fairly you may potentially claim for:

• Wrongful dismissal;

 

• Unfair dismissal; or

 

• Further redundancy payments.

 

9. How Are Redundancy Payments Calculated?

A redundancy payment can either be based upon the legal minimum or based upon the terms of your employment contract. If you have not received the correct amount of redundancy pay as stated by law, you can bring a claim in the Employment Tribunal for that amount. The same applies if you have not received what you were entitled to under your contract, but only if your contract states redundancy payment figures.

 

 

10. Can My Employer Advertise Positions Which Have Apparently Been Made Redundant?

An important consideration which you should note is that positions which have apparently been made redundant and then subsequently advertised by your employer can potentially be called into question.

 

 

11. When Should My Employer  Issue Me With A Settlement Agreement?

As a general rule “out of court settlements” of employment disputes are not legally binding in that they cannot exclude your right to take the matter concerned to an Employment Tribunal. However, this is legitimately circumvented by entering into a formal settlement agreement between you and your employer which fulfils certain legal requirements.

 

 

12. Are There Specific Requirements To Be Adhered To In Respect Of Settlement Agreements?

One of the most important conditions is that you must have had advice from a relevant independent adviser. Without this a settlement agreement will not be valid. Another condition is that the settlement agreement must relate to particular proceedings. It will not be valid if it is a generalised “full and final settlement” agreement – It must contain a near exhaustive list of the rights which you will be expected to waive in consideration for the settlement agreement from your employer. Agreements of this nature should always be negotiated on a “without prejudice” basis until concluded.  This means that you would not be able to rely on the content or discussions surrounding the negotiations of the settlement agreement, if you reject the settlement agreement and bring a claim against your employer.

 

RT Coopers Solicitors, 2020

 

If you require any further advice or assistance with regard to redundancy and/or advice on the terms of your settlement agreement, please contact one of our redundancy lawyers: on 0207 488 9947 or by email.  Also visit our settlement agreement Website for more information.