Redundancy is a form of dismissal that usually happens because an employer no longer needs a particular role, is reducing its workforce, changing how the business operates, relocating or closing part or all of the organisation. It should be driven by the requirements of the business and should not be used as a substitute for addressing an individual’s performance or conduct.
If you are facing redundancy, understanding your redundancy rights as an employee can help you assess whether the process is being handled fairly.
Do you have a right to be consulted?
Your employer should consult with you before making a final decision about your redundancy.
Consultation should be genuine and meaningful. It gives you an opportunity to understand why your role is at risk, ask questions, challenge information and suggest alternatives that might avoid redundancy.
There is no set statutory length for individual consultation where fewer than 20 redundancies are proposed, but the process should take place before the final decision is made.
If an employer is proposing 20 or more redundancies at one establishment within 90 days, collective consultation requirements currently also apply. This normally involves consultation with recognised trade union representatives or elected employee representatives.
How should employees be selected for redundancy?
Where several employees carry out similar roles but only some positions need to be removed, an employer may create a redundancy selection pool and use selection criteria to decide which employees are at risk.
Selection criteria should be as fair and objective as possible. They could consider areas such as:
- Skills and qualifications
- Performance
- Experience
- Disciplinary record
- Attendance, where appropriate.
Employers should be able to explain how the selection process works and how scores have been reached.
You must not be selected for redundancy for a discriminatory or automatically unfair reason. For example, an employer cannot select you because of pregnancy, disability, race, sex, age, trade union membership or because you have raised certain protected concerns such as whistleblowing.
If you believe your selection score is incorrect or unfair, you should raise this during consultation.
Should your employer look for another role?
Employers should consider whether there is suitable alternative employment available within the organisation before making an employee redundant.
Whether another job is suitable can depend on factors including:
- Pay and benefits
- Location
- Responsibilities
- Working hours
- Your skills and experience
- How similar the new role is to your existing position.
If you accept an alternative role, you will usually have a four-week statutory trial period to decide whether it is suitable.
You should take advice before rejecting a role that your employer considers suitable. Unreasonably refusing suitable alternative employment could affect your entitlement to statutory redundancy pay.
Pregnant employees and certain new parents have additional protection and can have priority for suitable alternative vacancies during their protected period.
Are you entitled to redundancy pay?
Employees with at least two years’ continuous employment will normally be entitled to statutory redundancy pay.
The amount depends on your age, length of service and weekly pay. The calculation provides:
- Half a week’s pay for each full year you were under 22
- One week’s pay for each full year you were aged 22 to 40
- One and a half weeks’ pay for each full year you were aged 41 or over.
A maximum of 20 years’ service can be taken into account.
The statutory limits are normally reviewed each year.
Your employment contract or employer’s redundancy scheme may provide a more generous enhanced redundancy payment.
Are you entitled to notice pay?
Redundancy does not remove your right to notice.
As a minimum, statutory notice is generally:
- One week if you have worked for your employer for between one month and two years
- One week for each complete year of employment between two and 12 years
- 12 weeks if you have worked there for 12 years or more.
Your contract may provide a longer notice period.
Your employer may ask you to work your notice or, depending on the circumstances, make a payment in lieu of notice (if there is a contractual right to do so).
Can you take time off to look for another job?
If you have at least two years’ continuous employment by the end of your notice period, you are entitled to a reasonable amount of time off to look for another job or arrange training.
There is, however, a statutory limit on how much of this time your employer is required to pay for.
Can you challenge a redundancy decision?
You may have grounds to challenge your redundancy if, for example:
- There was no genuine redundancy situation
- You were selected unfairly
- The selection criteria were discriminatory
- Your employer failed to consult properly
- A suitable alternative role was available but was not offered
- The outcome appeared to have been decided before consultation took place.
Where your employer has an appeal procedure, raising an internal appeal can give them an opportunity to reconsider the decision.
Depending on the circumstances, you may also be able to bring an unfair dismissal or discrimination claim in the Employment Tribunal.
Employment Tribunal claims are subject to strict time limits, so it is important to seek advice promptly rather than waiting until discussions with your employer have concluded.
Getting advice during a redundancy process
Every redundancy situation is different. The fairness of the process can depend on why redundancies are being proposed, how employees have been selected, the consultation carried out and whether alternatives have been properly considered.
DTM Legal’s Employment & HR team advises employees on redundancy, unfair dismissal, consultation, redundancy pay and employment exits, helping you understand your rights and decide what steps to take.
If you have been told that your role is at risk of redundancy or have concerns about how you have been selected, contact DTM Legal’s Employment & HR team to discuss your position.