Unfortunately, with the current Covid-19 economic downturn the prospect of redundancy is becoming an increasing reality for many.
Last month, figures from the Office for National Statistics showed 695,000 Brits have lost their job since March 2020 with unemployment at 4.1%. This is an uncertain and stressful time for many employees finding themselves worried that they will lose their job during the corona crisis. But what exactly is redundancy and what are your rights? We set out below what tips should an employee follow when they get that call or email starting the redundancy process?
What is redundancy?
Redundancy can be a lawful reason to terminate someone’s employment – but what is the legal definition? “Redundancy” is the term used when an employer reduces its workforce due to one of the following: -
- Business Closure: where an employer is ceasing or intending to cease the business for the purpose of which the employee was employed.
- Workplace Closure: where an employer is ceasing or intending to cease the business in the place where the employee was employed.
- Reduced requirements: where there is a reduced requirement for employees to carry out a particular kind of work, or a particular kind of work in the place where the employee was employed.
The last of these three tend to give rise to the most legal issues as there will often be judgments made by the employer as to who to keep and who to let go – those judgements need to be made fairly. Just because an employee is told they are being made redundant, does not mean that their resulting dismissal with be automatically lawful. You may be able to bring a claim if you are unfairly selected for redundancy, your selection is discriminatory, or your employer has failed to follow a fair procedure.
What to do when you are told your role is “at risk” of redundancy?
Being ‘at risk’ doesn’t necessarily mean you’ll be made redundant – in some cases your employer may try to redeploy you. Your employer has a legal duty to consider whether there are suitable roles which at risk employees could undertake. The suitable alternative does not have to be in the same location. You should be offered a trial period in the new job to allow you to determine whether you are suited to the role. While you do have the right to refuse an offer of suitable alternative employment, if you reject the role outside of a trial period you could miss out on your statutory redundancy pay.
Is the redundancy genuine – many employers at the moment, may quite genuinely, assert they need to reduce headcount due to a reduction in a particular type of work. However, not all dismissals said to be by reason of redundancy are genuine redundancy situations. Sometimes ‘redundancy’ can be seen as an easier reason to bring employment to an end rather than dealing appropriately with for example capability or performance issues which some employers can find awkward to handle. If you do not believe the work you do has in fact decreased indications to look out for could be whether your employer has recently recruited staff to your team, or indicated it intends to in the near future; if your employer has recently been critising your performance; or are you are the only one at risk of redundancy? Are you pregnant/on maternity leave? Or is there anything to suggest your selection is due to a protected characteristic?
Your employer must not discriminate against you – it’s discrimination if you’re made redundant at least partly because you have a protected characteristic under the Equality Act. These include pregnancy or maternity leave; sex, sexual orientation, disability, race, marriage and civil partnership, gender reassignment, religion and belief, and age. You can be made redundant if you’re in one of these characteristics, but not if that’s the reason you’re made redundant. You do not need two years’ service if your dismissal is discriminatory.
Your employer must follow a fair procedure – if you have worked for your employer for more than two years and they fail to follow a fair procedure when making your role redundant, your dismissal could be deemed unfair. If your employer is reducing staff numbers in a particular role they must: identify a suitable pool of people to select from; use fair selection criteria which are as objective as possible to decide who from the pool will be made redundant; consult with each employee meaningfully at an early stage about why the redundancy is necessary and exploring ways to avoid it including considering any possible alternatives to redundancy; they must consult with trade unions/staff representatives if more than 20 redundancies are contemplated.
If you wish to challenge a redundancy you should seek advice immediately as there are very strict time limits.
Redundancy pay – if you have two years continuous service you will be entitled to a minimum statutory redundancy payment which is calculated by reference to age, length of service and pay. This is in addition to your notice pay rights and accrued unused holiday pay entitlement. You may also have a right to enhanced, contractual redundancy pay.
Has your employer offered you a Settlement Agreement? If your employer has offered you a settlement agreement, you should not feel obliged or pressured to accept it. In signing an agreement, you will be waiving your rights to bring a claim against your employer. It is therefore essential, indeed it is a legal requirement, to seek legal advice regarding the contents of any settlement agreement before you enter into it. This will also help ensure that you reach an agreement which is beneficial to you and tailored to your needs. Your legal adviser must be independent of your employer.
It is important that an employee facing the prospect of redundancy is aware of their rights and the correct procedure that should be adopted by their employer.
In certain circumstances, redundancies are inevitable and unavoidable, but knowing your rights will enable you to spot breaches of procedure, identify situations where you may have a claim and ultimately help you to ensure that you are treated fairly and/or secure a better termination package.
For more information on the topic please contact Nick Campbell or another member of our Employment team.
