CAB across Northern Ireland have been reporting increases in the number of redundancy issues being dealt with which is hardly surprising given the current economic situation.
Redundancy is a form of dismissal. A dismissal will be a redundancy if:
- the employer's business, or part of the business, has ceased to operate; or
- the employer's business has moved to a different place; or
- the business's need for work of a particular type to be done has ceased or diminished.
Redundancy is often used as a neutral sounding reason for dismissing someone, however it can be used to hide other reasons for the dismissal, such as discrimination. If the employee is not genuinely redundant, they may have been unfairly dismissed and can take the matter to an industrial tribunal.
When an employer is deciding which employee should be made redundant, they must follow a procedure which is fair, objective and non-discriminatory, using objective criteria. There are established principles of good employment practice which employers should follow:
- the employer should try to find suitable alternative employment for the employee – whether an alternative job is suitable will depend on the terms of the job offered and the employee’s skills and abilities. The employee has the right to try out the job before they decide to take it for a trial period of four weeks;
- the employer should use objective criteria when deciding who will be made redundant – the employer can choose any selection criteria provided they can be objectively assessed, for example, length of service, ability and performance, time keeping, etc. The use of some criteria, for example, younger or older workers, pregnancy, part-time working are discriminatory. In addition, the use of other criteria might be indirect discrimination if they have a disproportionate affect on one particular group;
- the employer should try to give as much warning of the redundancies as possible and consult with individual employees;
- the employer should try to ensure that the selection for redundancy is fair and in accordance with the criteria that has been set.
The statutory redundancy payment scheme obliges employers to make basic redundancy payments to employees who are made redundant and who qualify because they have worked for the employer for at least two years. The amount of money an employee will get as a statutory redundancy payment will depend on how long they have worked for their employer, their age and how much they are paid. There is a limit on how much statutory redundancy pay an employee can receive, based on the number of complete years worked and on the amount of money which is allowed to count as weekly pay. There is a maximum amount that can count as a week's pay, irrespective of how much the client earns and the current maximum amount has increased from £380 to £400 from 13th February 2011. An employee may also be entitled to more redundancy pay under their contract.
An employee is entitled to time off with pay for job hunting or to arrange training when facing redundancy if they have worked for their employer for two years. The time off must be allowed during the period of notice. There is no definition of how much time the employer has to give but it must be reasonable.
A free fact sheet on the issue of redundancy is available from the Citizens Advice website at www.citizensadvice.co.uk/publications. Redundancy is a complex issue and free advice and information can be sought from your local CAB. Guidance on redundancy can be found on www.nidirect.gov.uk if you are an employee or worker and www.nibusinessinfo.co.uk if you are an employer.
Siobhan Harding is an Information and Policy Officer with Citizens Advice