Redundancy in the current climate


10 March, 2009

Due to the current economic climate the decision to make some employees redundant may be something which many businesses have to consider. With limited financial resources employers may be tempted to simply dismiss employees without complying with the statutory procedures and as a result may fall foul of Employment legislation.

It is not only important that employers are aware of the notice period that they are required to give to employees but the manner in which staff are made redundant could result in claims for unfair dismissal in the Employment tribunals. The notice provided under the contract of employment must be followed but this must also comply with the minimum statutory notice periods.

One of the potentially fair reasons for the dismissal of an employee is on the grounds of redundancy. However, just because the business needs to make some employees redundant does not mean an employer no longer has to follow the statutory procedure. The dismissal itself must be fair and reasonable.

Employees must be consulted about the redundancy situation prior to any decision being made. Employers need to consider suitable alternative employment and ways in which the redundancies can be avoided, how the number of redundancies could be reduced or reducing the effects of the redundancies. The selection of an employee for redundancy must also comply with certain requirements and in principle must be fair and objective. It is important that employers do not 'cherry pick' those employees who they wish to dismiss.

An employer must also comply with the statutory dismissal procedure which was introduced in 2004. This involves having a meeting with an employee to discuss the possible termination of their employment on grounds of redundancy, allowing the employee to be accompanied at the meeting by a union representative or work colleague and allowing the right to appeal any decision made by the employer. If the employer fails to follow the statutory dismissal procedure it will amount to an automatic unfair dismissal.

An employee may also be entitled to a redundancy payment to compensate them for losing their job. There may be contractual provisions which are more favourable to an employee than the statutory minimum. The statutory minimum requires an employee to have at least 2 years continuous employment and the amount payable is calculated with reference to their length of service together with their age and based upon currently a maximum of £330.00 per week. An employer that fails to comply with this may find themselves facing claims at the Employment Tribunal.

For expert legal advice on ensuring that your business complies with the legal requirements when contemplating redundancies contact the Employment Lawyers at Forbes Solicitors where we will advise and assist you through the process.

Please contact Forbes Solicitors on freephone 0800 975 2463 or by email today.


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