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Redundancy & Restructure - Employers

Please click here if you are an employee and want to find out more about redundancy.

Often the term ‘redundant’ is used to describe any dismissal which does not arise from misconduct. However, legally, redundancy has a specific meaning. Redundancy will occur where an employer decides to reduce the number of its employees, either within the business as a whole, or within a particular site, business unit, function or job role.

Broadly speaking, redundancy situations fall into three categories:

  • Business closure (that is, closure of the business altogether)
  • Workplace closure (that is, closure of one of several sites, or relocation to a new site)
  • Diminished requirements of the business for employees to do work of a particular kind

Redundancy is no more than a potentially fair reason for dismissal. Employers must follow a fair procedure, which includes consultation with employees, and adopt a proper selection process. An employer cannot necessarily avoid a claim for unfair dismissal merely because it can show that an employee was dismissed by reason of redundancy.

An employer is under a duty to offer suitable alternative employment during a redundancy process, should such employment exist. Any offer made will be subject to a trial period.

In certain circumstances, selection of an employee for dismissal on grounds of (a genuine) redundancy will be automatically unfair; for example, selecting an employee for a reason connected to pregnancy, or because the employee has refused to sign a working time opt-out agreement.

If an employer falls short in any of the aspects above, an employee may have a claim for unfair dismissal.

If you are considering restructuring or making redundancies, our specialist employment solicitors can guide you through the process and ensure you adopt the correct procedure. Our employment law solicitors can provide you with checklists for each step of the process and draft the appropriate letters to provide to employees at each stage.

If you will be making ‘ex-gratia’ payments to employees, it is usually advisable to do so by way of a Settlement Agreement (previously known as a Compromise Agreement). Each employee will be asked to sign such an agreement before any payments are made. Our employment law solicitors can draft the agreement for you to ensure it covers all it needs to.

Our employment lawyers are able to adopt the right approach for the particular circumstances involved. If you need any assistance in this area, please contact one of our specialist employment lawyers as early as possible to ensure your business is protected.

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