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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.

Click here for more detailed information on redundancy.

Click here to contact Philip Landau for an initial free consultation.

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