Redundancy can occur when a business is not making enough a money to survive or when certain positions become obsolete.
But whatever the reasoning, an employer has to have just cause for making someone redundant.
Correct Redundancy Procedure
- An employer cannot force people to re-apply for their own jobs under any circumstances.
- All staff should be told in writing that redundancies are going to be made. This way people can prepare and consider whether to take voluntary redundancy.
- Employers must keep all staff informed of each step of the redundancy process including meetings to discuss individual options.
- It is important an employee is given the chance to put his point of view across and make any suggestions such as offering to take a pay cut or work part time.
- Those chosen for redundancy should have the reason why they were selected explained to them, especially if several people carry out the same role.
- If 20 or more members of staff are being made redundant, then a trade union or employee committee must be drafted in to work with staff during the process.
Employee Rights
After being told in writing that a person has lost his job, he has the right to appeal against the decision if he feels it is unfair. If a person has been employed with the company for under two years he can expect one week's notice. This increases to two weeks for two years service, three weeks for three years and so on.
Companies do require employees to work out the notice, but should allow sufficient time to attend job interviews, apply for jobs and write a CV. During the redundancy period employees continue to be entitled to holiday or sickness pay.
If there are any vacant posts that match a person's skills, he should be considered for the role; otherwise there could be a valid claim for unfair dismissal.
Statutory Redundancy Pay
The amount of redundancy pay an employee will receive depends on how long he has been employed with the company.
To receive a payout, employees need to conform to certain criteria.
- The employee must have been working for at least two years with the company.
- A fixed contract must not have reached its end.
- The maximum amount of redundancy pay a person can receive tax-free it £30,000. It is important that any outstanding holiday entitlement is included in a the amount.
- If a person normally receives other financial benefits including overtime, bonuses or commission as part of his regular employment then this should be factored into any settlement.
If an employee is unsure they are being treated correctly during the redundancy process it is vital legal advice is sought. The Citizens Advice Bureau or trade unions are able to help people get what they entitled to.
Jayne Elliott - Jayne Elliott is an experienced journalist, writer and broadcaster. She has worked on local newspapers, regional radio and in national ...
Join the Conversation