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Redundancy - Employees

Please click here for more information on redundancy for employers.

Redundancy can be daunting but employees have a number of rights in a redundancy situation and it is important to understand these. Redundancy is often a term which is misused within the field of employment. 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

The fact that you may have been dismissed by reason of redundancy does not, in itself, mean that the dismissal was not unfair dismissal. Redundancy is no more than a potentially fair reason for dismissal. Employers must follow a fair procedure, which includes consultation with you, and adopt a proper selection process.

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, as an employee, you may have a claim for unfair dismissal.

As an employee, if you are dismissed for redundancy you may be entitled to a redundancy payment, either under the statutory scheme or under a more favourable contractual scheme. You will also be entitled to receive contractual or statutory notice pay. Employers will often look to make a payment in lieu of notice which means that you will not be required to work your notice period.

It is common for employers to ask you to sign a settlement agreement (previously known as a compromise agreement) and in exchange will offer an additional ‘ex-gratia’ sum for doing so. For a settlement agreement to be legally binding, you must receive independent legal advice. Our specialist employment lawyers will be able to expertly assist you.

At Warners we treat each case individually and tailor our advice to suit your needs. We appreciate that you may not wish to commence a claim in the Employment Tribunal but it can still be advisable to appeal the decision. This may lead to a payment to you on more favourable terms. Our employment lawyers are able to adopt the right approach for the particular circumstances involved.

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