Guide to Redundancy for Employees in England & Wales

23 June 2016

This guide from our Employment Solicitors will help you to understand:

  • Redundancy employee rights
  • The responsibilities of your employer throughout the redundancy process
  • What you should expect to happen

By understanding how the redundancy process works, you can be prepared and feel more in control, which can help to reduce some of the stress.

Your employer will not relish the fact that they have to make some of their employees redundant, but they can really help the process by engaging with their staff and practicing good communication with its employees.

You have the right to be fairly selected for redundancy and depending on your length of service with your employer, you might be entitled to a Statutory Redundancy Payment from them, along with whatever earnings are due during your notice period. Some employers may decide to pay you in lieu of notice if your contract of employment allows for this but consultation and notice cannot run at the same time.

Redundancy Consultation Rights

If your employer is making more than 20 people redundant at one place (establishment) over a period of 90 days or less, you have the right to a Collective Consultation. It's important that your employer also engages and consults with you individually too.

They must include union representatives (if they recognise them for Collective Consultation) and/or employee representatives.

Any consultation must begin at least 30 days before the first redundancy takes place where there are more than 20 employees being made redundant and less than 99 employees being made redundant at the same establishment

If there are 100 or more employees being made redundant, the consultation should take place at least 45 days before the first redundancy.

These are the minimum timelines for consultation and your employer may decide that they want a longer consultation process. Consultation must me meaningful and not just the employer "going through the motions."

If your employer does not follow the correct procedure during the Collective Consultation process, it may mean that they have to pay out a protective award to anyone affected. This is compensating staff for their failure to follow procedure.

During the Collective Consultation, your employer should make a number of disclosures. They are:

  • The reasons for the redundancies
  • How many people will be made redundant and who is affected
  • The selection process for deciding who will be made redundant
  • How long the consultation and redundancy process will take and when the dismissals will take place
  • How any payments above the statutory requirements will be calculated

All of this information will mean you can take a more active part in the redundancy process.

Redundancy Procedure

If your employer doesn't have one already, they are probably considering whether to make a formal process for redundancy. This will make sure that everyone is clear on what will happen and has the information available, which will help to reduce stress levels for you and relieve some of your fears.

Where a new procedure is being put into place, negotiations and agreements should take place with any Trade Unions or employee representatives.

If there is no redundancy policy or procedure in place where you work, and your employer does not follow a reasonable process, they could be at risk of facing an Unfair Dismissal Claim from all their affected employees.

Any redundancy policy will probably contain the following items:

  1. An introduction to state how your employer will maintain their employees job security
  2. Consultation timelines and the people involved in them
  3. How they will minimise redundancies, particularly compulsory redundancies. This will be through natural wastage, recruitment freezes, voluntary early retirement and voluntary redundancies
  4. An outline of the redundancy selection criteria
  5. Details of redundancy pay and benefits
  6. Relocation information and appeals processes
  7. How your employer will help you to find a new job with training or time off

If your employer has a redundancy policy, use it to check on the process so you are clear about what will happen.

Redundancy Selection

Your employer will consult with you on the criteria they will use to select for redundancy once the consultation process starts. Whatever criteria they choose should be applied fairly and consistently, and your employer is likely to select based on skills and experiences along with some of the following:

  • Your attendance at work
  • Your disciplinary record
  • Your performance at work
  • Your natural ability to do your job

There are certain criteria that your employer cannot select you on. These are protected characteristics. There are nine protected characteristics and they are: gender, age, sexual orientation, race, religion, disability, marriage, pregnancy or gender reassignment.

If they do, this is discrimination and you will probably have a claim for workplace discrimination.

Your employer will ask their employees if anyone wishes to take voluntary redundancy or early retirement which will probably reduce the number of people who will need to take compulsory redundancy. They should also factor in any natural wastage that will probably happen. Where possible, there should be the opportunity for redeployment into another department or part of the business.

Redundancy Payments

If you have worked for your employer for more than 2 years, you may be entitled to a payment. This will either be a statutory payment (as decided by law) or a contractual payment. Any contractual payment will be specified into your employment contract.

The current Statutory Redundancy Payments are:

  • 0.5 week's pay for each year of service when they were under the age of 22
  • 1 week's pay for every year of service when they were between 22 and 40 and
  • 1.5 week's pay for every year of service when they were older than 41

There is a maximum statutory limit of 20 years' service and the amount of weekly pay is capped at £571 a week.

You are also entitled to a paid notice period. The notice period depends on how long you've worked for your employer.

You get 1 weeks' notice if you've been employed for more than 1 month and less than 2 years, 1 weeks' notice for every year you've been employed between 2 years and 12 years and 12 weeks' notice if you've worked for your employer for more than 12 years.

This is known as your Statutory Notice Period. Your contract of employment may set out a contractual notice period which is better than the statutory minimum but it cannot be worse You should check your contract of employment or staff handbook if you are unsure about this.

Our Employment Law Solicitors fully understand that redundancy is a stressful time for you and it can be particularly worrying if you think your employer has not treated you fairly throughout the process. Time is limited to make a claim, so the quicker you get expert legal advice the better.

More articles