FAQ on Redundancy : Making Employees Redundant

• As an employer, when can you make employees in your workplace redundant?

   

As an employer, you may only make employees redundant, if you have genuine reasons for terminating the employment of employees.

 

• What are your responsibilities when contemplating and/or making employees redundant?

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

• Planning

   

You are under an obligation to draw up a plan to decide which employees would be kept on or made redundant.
 

• Consultation

You should note that in the event that 20 or more employees are at risk of being made redundant, you have a duty to consult with the employees’ representatives, including any relevant trade unions.
 

• How should you implement the selection procedure?

 

You must show in detail a fair selection procedure and criteria.
 

• What could happen if the redundancy is not carried out fairly?

You 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 this may lead to a claim for:
 

- Wrongful dismissal;
- Unfair dismissal; or
- Further redundancy payments.
 

• How are redundancy payments calculated?

A redundancy payment can either be based upon the legal minimum or based upon the terms of the employees’ employment contracts.
 

• What are the remedies for the employees if the redundancy is not carried out fairly?

You should note that employees may bring the following claims against your organisation, if the redundancy is not carried out properly:

 

- Unfair dismissal

- Sex discrimination
- Race discrimination

- Disability discrimination

- Wrongful dismissal
 

• When should our organisation issue compromise agreements?

As a general rule “out of court settlements” of employment disputes are not legally binding in that they cannot exclude employees’ rights to take the matters concerned to an Employment Tribunal. However, this is legitimately circumvented by entering into formal compromise agreements with the employees which fulfil certain legal requirements.

 

• Are there specific requirements to be adhered to in respect of compromise agreements?

One of the most important conditions is that the employees must have had advice from their relevant independent advisers. Without this compromise agreements will not be valid.
 

•  Constructive Dismissal - What is constructive dismissal?

Under English law, employees may resign from their positions and treat themselves as having been dismissed by you, if you act in a way that is deemed a fundamental breach of the employees’ contract.
 

• What would happen if the mutual trust and confidence in the employment relationship has been breached?

 

Any attempt to exclude this covenant from a contract is null and void.
 

• What is the minimum disciplinary procedure that has to be applied in relation to employees’ conduct?

Employees are entitled to the benefit of a minimum standard of formal disciplinary procedure.
 

• What are the requirements in respect of disciplinary hearings?

 

The employees must be given sufficient time to prepare for the interview. The employees should also be given the opportunity to appeal against the decision.
 

If you require any further advice or assistance on redundancy advice or settlement agreements, please contact us to arrange a meeting on 0207 488 9947 or by email.  

Please note we only undertake redundancy advice and advice on settlement agreements.