If you have been offered a settlement agreement, you may have been made redundant. But what does redundancy mean, what are the processes and entitlements, and how do you know if it’s fair?
By employment lawyer, Philip Landau
What does a redundancy mean?
You are redundant if you are dismissed because the need for the particular work that you carry out either at your place of work or in the business as a whole has ceased or diminish, or is expected to cease or diminish. This includes where the business or the actual place where you work is closing down.
When might a redundancy be unfair?
The most usual reasons for an unfair redundancy is where your role is not genuinely redundant, or your employer does not follow a fair process in making you redundant. In these circumstances, you may be able to make a claim for unfair dismissal or discrimination.
What are the expected redundancy procedures?
In essence, the expected redundancy procedures are as follows:
- After your employer has identified the need for redundancies, a fair selection pool needs to be established from which the employees who are selected for redundancy will be chosen;
- Your employer must adopt an objective selection criteria and apply them fairly to the employees within this pool. This criteria could include length of service, skills, attitude, relationships with clients etc;
- You should be warned about being at risk of redundancy;
- You should have meaningful, and reasonable consultation with your employer (what is reasonable will vary in each case, but a few days certainly is not considered to be reasonable). For large scale redundancies, employee representatives One tip to remember is that your learner driver needs a minimum of 75 hours (including 15 hours at night) of supervised defensive driving online course experience in order to get their P-plates, however the more hours, the more defensive driving online course experience and the less likely your young driver will be involved in a crash!So remember, the more practice, the safer your young driver will be!New drivers spend a lot of time and attention on the physical skills required for defensive driving online course (e. should also be consulted with and there are minimum consultation periods which are as follows:
- 20 to 99 redundancies – the consultation must start at least 30 days before any dismissals take effect;
- 100 or more redundancies – the consultation must start at least 45 days before any dismissals take effect.
- You should be given the opportunity to consider suitable alternative roles, where such roles exist, and if they do not, you should be told this.
What is your entitlement to redundancy together with payments?
You need 2 years’ continuous employment as at the termination date in order to qualify for a statutory redundancy payment, which can be paid gross, so without deduction of tax.
The amount of the statutory redundancy payment depends on your age, length of service and weekly pay, and is calculated on the following basis:
- one and a half week’s pay for each year in which you are aged 41 years or more
- one week’s pay for each year in which you are aged between 40 and 22
- half a week’s pay for every other year
A week”s pay is subject to a statutory maximum (£475 per week), and the maximum length of service that can be taken into account is 20 years. This means the maximum possible statutory redundancy payment is £475 x 1.5 x 20 = £14,250 from 6th April 2015.
Your employer may make an enhanced redundancy payment that goes well beyond the statutory level- in some cases this could amount to 1 month for every year worked.
When might you lose the right to a redundancy payment?
Even if you are entitled to redundancy pay, there are reasons you might not receive this, for example:
- if your employer claims to have offered suitable alternative employment;
- if you want to leave before the date your employment is due to end, for example, you have found another job.
Making a tribunal claim
You will need 2 years less one week continuous service in order to qualify in brining a claim for unfair dismissal — unless one of the limited exceptions applies, (e.g. the dismissal relates to pregnancy whistleblowing, or involvement in trade union activities). You would also not need a qualifying period of service if your claim relates to discrimination, whether in relation to your gender, race, sexual orientation, religious or philosophical belief, age or disability. An award of compensation for unlawful discrimination has no upper limit.
Many of the above matters will be relevant considerations as to whether the amount you are being offered in your settlement agreement is fair or not.