Redundancy rights: What are my redundancy rights?

A legal guide to employee redundancy rights

Discovering you could be made redundant is a worrying and stressful time. If you haven’t experienced a redundancy situation before then it is important to have at least a basic understanding of what the process might involve and what your rights are.

Here, we have tried to address some of the key points.

What is redundancy?

Redundancy occurs when an employer needs to reduce the workforce.

This can be for several reasons, e.g. where the employer needs to reduce numbers in a certain area of the business or an office is closing with no possibility for staff members to be relocated.

Sometimes a redundancy situation may not be as clear cut, e.g. when there is a restructure within a department or a re-organisation of work between employees.

What is voluntary redundancy?

When an employer thinks that a redundancy situation might occur in the future, then sometimes it will offer voluntary redundancy packages.

A voluntary redundancy package will normally be enhanced terms which are better than the statutory redundancy payments that employers are required by law to pay.

When these packages are offered, some employees might then decide to “volunteer” and take “voluntary redundancy”.

What is the redundancy process?

There aren’t explicit rules on how an employer should conduct a redundancy procedure, but if an employer is following a fair process, you can normally expect:

• A warning: This is where the employer tells you that your role is at risk of redundancy.

They may have a meeting with you to explain this and then follow up by sending you a letter to confirm.

• A consultation period: You and your employer will discuss the reasons for the redundancy and how this has come about.

You may have further meetings with your employer at this stage, which will act as an important chance for you to ask questions about the redundancy and the process.

• A fair basis for selection: Your role is scored and selected for redundancy from other positions according to criteria/factors that you have been able to see and comment on.

• Consideration of alternative employment: Your employer should work with you to try to avoid the redundancy of your role and look for other roles you might be able to do within the company.

• Opportunity to appeal: If you are dismissed by reason of redundancy then you might be offered a right to appeal against this decision. If you are not offered a right of appeal, then you should ask for one.

During the redundancy process you should also have the right to reasonable time off work to look for alternative employment.

If your employer tries to go through a redundancy process without meeting with you, and while you are on sick leave or maternity leave, then depending on the circumstances there might be a potential discrimination claim.

Your redundancy rights

• If you have less than two years of complete continuous service: You do not have the right to claim unfair dismissal, if your employment terminates in a redundancy situation.
• If you have two or more years of complete continuous service: You have the right to not be unfairly dismissed.

This means your employer must follow a fair redundancy process in dismissing you and if they don’t, then you may have a potential claim for unfair dismissal.

Redundancy is potentially a fair reason for an employer to dismiss an employee. If there really is a genuine redundancy situation and your employer carries out a fair process you will not succeed in claiming unfair dismissal.

Sometimes we see cases where there is not a genuine redundancy situation and there are other reasons behind the redundancy which mean it is unfair.

There are also some cases where the reason for the redundancy is discriminatory or automatically unfair.

Do I have to work my notice period if I am being made redundant?

It is likely that your contract of employment says you must either work your notice period or be paid in lieu.

Sometimes when an employer is making redundancies, they make a pay in lieu of notice (called PILON for short), this means they can terminate your employment sooner and pay you for this period, rather than you working your notice period.

If your employer suggests making a PILON to you, then you should think about whether you are happy with this arrangement.

Some employment contracts contain wording which means that employers have a contractual right to make a PILON payment and terminate an employee’s contract of employment at any time if they wish to do so.

Am I entitled to redundancy pay?

You should be paid your salary and benefits as normal to the date of termination, and you should either be paid or work for your notice period. You should also be able to take your holiday entitlement before your employment terminates or be paid for this on termination.

If you have less than two complete continuous years of service: you do not have any entitlement to a statutory redundancy payment.

If you have two or more complete continuous years of service: you are entitled to a statutory redundancy payment.

How much will my redundancy pay be?

Your employer should calculate this and tell you how much it will be. The amount you are entitled to will vary on the length of your service, your age at termination and your weekly pay.

If your employer has served you with notice, they should tell you what payments they will make to you on termination and explain to you how and when these will be paid.

You should receive a payslip for all payments you receive from your employer, and you should be sent a P45 form on termination of employment, which should tell you what deductions have been made for tax and which you should follow up with your employer if you do not receive them.

When does redundancy constitute an unfair dismissal?

If your employer needs to make redundancies and warns you that your role is at risk, they are obligated to conduct a fair and just process to identify which staff members should be made redundant. They are not allowed to use redundancies to dismiss employees unfairly.

A redundancy may be considered an unfair dismissal if you have been made redundant because:

• You requested a change to your working pattern or working hours (for example, asking for flexible working)
• You disclosed wrongdoing in the workplace (i.e. whistleblowing)
• You raised a complaint about discrimination in the workplace
• You joined a trade union
• You were on maternity, paternity or adoption leave, or you requested maternity, paternity, or adoption leave
• You need to take time off for jury services

Protect your redundancy rights with our employment law specialists

If you think you have been treated unfairly, it is important to seek legal advice as quickly as possible as you may have a potential claim for unfair dismissal and you may also have other claims. You can also try to internally appeal against your dismissal.

The time limits for potential employment tribunal claims are very short, and you need to act on your potential claims within 3 months less one day of your complaints.

For more information, call us on freephone 0330 041 5869 or contact us online.

All the above information was correct at the time of publication.