Redundancy claims

Redundancy is a potentially fair reason for dismissal. It is fair to say that in the absence of blatant unfairness and discrimination an Employment Tribunal is often reluctant to revisit the decisions made by an employer with regard to redundancy and may not wish to interfere with a redundancy that appears on the face of it to be reasonable.

However, some redundancy processes are unfair, and if you think the procedures leading up to your redundancy were not carried out fairly, you may have a claim.

What employers should do in redundancy situations

Employers are expected to go through a fair process when making employees redundant. They should:

• consult representatives and individual employees before dismissing them. If more than 20 people are being made redundant the employer has a duty to consult employee representatives. Breach of this duty entitles affected employees to claim up to 90 days pay.
• properly identify those who are potentially redundant
• adopt fair selection criteria 

An employee who is dismissed without any procedure being followed, and who has one year's service or more can claim unfair dismissal. No minimum length of time in employment is needed if it is alleged that the selection for redundancy was for an automatically unfair reason (e.g. pregnancy).

There are three Redundancy situations:

1. Closure of a business or workplace

In this situation, an employee becomes redundant because either the business as a whole has closed, or the employer has closed a particular workplace where the employee was employed (e.g. a branch office). 

Redundancy can be the outcome even if your contract called for you to work in more than one place and some of the other workplaces remain open. If you have only ever worked in one place and that place of work closes, you can be made redundant.

2. Reduction in the size of the workforce (i.e. where the employer wants fewer employees to do a particular kind of work)

Employers are allowed to look at the need for fewer employees across the business as a whole, not just in respect of a particular department of the company, or particular group of workers performing a specific type of work. Effectively, this can mean an employee can be bumped out of their job by another employee who was doing something else the employer no longer needs them to do.

If a group of employees are selected for redundancy the employer needs to show:

• what type of work they do
• why the demand has ceased or stopped completely.

If the amount of work has decreased so that only some of the employees within a group are selected the employer must show how they picked the unlucky ones.

The selection criteria should not be based on an individual's view of an employee and cannot be based upon unfair reasons such as trade union membership or activity. If the selection criteria are based upon race disability or sex the affected employee can claim under unfair dismissal or make a claim for discrimination.

Once the criteria have been agreed the employer should apply them consistently in selecting employees for redundancy.

3. Alternative work

The employer in a redundancy situation can offer the employee other work as an alternative to redundancy. It is up to the employee whether to accept or not. However if an employee unreasonably refuses an offer of a suitable alternative employment the employer may be able to avoid paying them a redundancy payment.

For the job offered to be truly considered alternative, it must have similar pay conditions and skill requirements. A refusal will be looked at from each employee's point of view.

An alternative job offer must be made before the current job ends and the start date must be no more than 4 weeks after the old job ends. The first 4 weeks are what is referred to as the trial period. During this time, or when the 4 weeks have expired, an employee can still leave the job and claim a redundancy payment.

If this happens, the employer can still argue that the job offered was suitable alternative employment and may refuse to pay a redundancy payment. In that event the employee could approach an Employment Tribunal to decide whether the job was suitable alternative employment.

Was your redundancy fair?

If you need advice because you think your redundancy was not fair, our employment solicitors may be able to help. Get advice now - call us on freephone 0800 422 0241 or complete our contact form and we will get back to you.