When redundancy hits
Uunfortunatley it seems these days that every week is bringing news of more redundancies. This article will look at the issue of redundancy and my first article of the New Year will look at the issue of redundancy pay in more detail.
Redundancy is a form of dismissal and is a potentially fair reason for 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.
An employer who intends to make an employee redundant must consider whether there are other jobs available which that employee would be capable of doing.
If such suitable employment is available, this must be offered to them. Failure to seek or offer suitable alternative employment to an employee will normally mean they are unfairly dismissed.
Whether an alternative job is suitable will depend on the terms of the job offered and the employee's skills and abilities.
A tribunal will generally consider objective job-related factors such as pay, status, hours and location when deciding if a job is a suitable alternative.
An employee who is considering the offer of another job with their employer has a right to try out the job before they decide whether or not to take it, without losing the right to statutory redundancy pay.
If any of the terms or conditions in the new job differs from the old job, they can work in the new job for a trial period of four weeks.
When an employer is deciding which employee(s) should be made redundant, they must follow a procedure which is fair, objective and non-discriminatory, using objective criteria.
Unfair selection for redundancy is a type of unfair dismissal. An employee who has been unfairly selected for redundancy may be able to claim compensation for unfair dismissal as well as a redundancy payment.
The employer is free to choose any selection criteria provided they can be objectively assessed, for example length of service, ability and performance, time keeping, the employee’s adaptability and the employer’s future needs.
The use of some criteria, for example, younger or older workers, pregnancy, part-time working or automatically selecting people on fixed-term contracts are discriminatory. Selection criteria should be agreed before anyone is made redundant.
Where an employer is making 20 or more employees at one establishment redundant within a 90 day period, this is called making collective redundancies and imposes additional obligations on the employer.
An employer making collective redundancies must consult the appropriate representatives of any employees affected, for example, a trade union.
The consultation should be 'in good time', but where it is proposed to make 100 or more employees redundant, it must be at least 90 days before the proposed dismissals, and for between 20 and 99 employees, at least 30 days before the proposed dismissals.
An employer must also notify the Department for Employment and Learning in advance if there are to be multiple redundancies. This notification must be made before any notice of dismissal is issued.
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.
Redundancy is a complex issue and advice should always be sought. Further information is available from your local CAB or from the Department for Employment and Learning by telephoning 028 9025 7580 or from their website at www.delni.gov.uk/er.
Siobhan Harding is an Information and Policy Officer with Citizens Advice