Redundancy Process

In a recent employment tribunal, SSI steel workers were awarded £6.25 million due to lack of communication during a redundancy process.  Redcar plant shut down last year leaving employees redundant.

Employers must consult with staff even if the end result is inevitable, or forfeit multi-million pound claims.  When dismissing 20 staff or more employers are obliged to consult with staff under a European Directive.

Redundancies should be a last resort and employers must be able to demonstrate that the employee’s job no longer exists. 

Reasons why a redundancy process is taking place:

  • Business ceasing to operate
  • Relocation
  • Introduction to a new technology which minimises the need for staff in a certain department

Legal minimums for redundancy pay:

  • Statutory notice period – this depends on employees length of service
  • Payment in lieu of notice – if the employee is prevented from working
  • Lump sum pay off (depending on the contract terms)

Where possible, employees should be offered alternative employment within the company.  If an employee accepts the offer they must be granted a trial period without the risk of losing their right to redundancy.

Staff must be paid at least statutory redundancy notice pay.  Employees with more that 2 years continued employment are entitled to redundancy pay.

The redundancy process is complicated and a fair selection process is imperative.  Seeking advice is highly recommended. Call Wurkplace if you need advice and/or support in a redundancy situation.

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