The recession has caused redundancy rates to soar, and even the most assiduous and best-qualified employees can face the possibility of being let go.
But if this happens, what exactly can you expect from your employer, and what are your rights?
What is redundancy?
The word redundancy is one of the most doomed words for an employee to hear, and unfortunately it’s being heard all too often right now as employers feel the pinch of the economic downturn.
Legally speaking, a redundancy isn’t a dismissal, but a reason for dismissal and you shouldn’t take it personally.
You can take comfort from two things though. First, you are far from being alone. Second, you have the protection of a robust framework of legal rights and safeguards, which cover every stage of the redundancy process. The over-riding principles throughout are fairness and transparency on the part of the employer.
Your legal rights
To implement redundancies, employers have to follow a sequence of actions, all laid out in legislation and the Employment Rights Act.
But even before they embark on the redundancy process, employers have to be clear that there are genuine grounds for making an employee redundant. Specific conditions have to exist.
Your employer can only seek to make you redundant when they have:
- Stopped (or plans to stop) doing what you were hired to do
- No need for your skills because it’s “ceased or diminished” or is “expected to cease or diminish”
- No option but to move its operations to a location beyond reasonable commuting distance
- Ceased trade
Clearly, these criteria can be argued, but it’s always incumbent upon the employer to be able to prove these reasons exist.
How do I find out?
Once the need to seek redundancies has been decided, the employer has to inform all affected staff and open up channels for consultation. This can be a tense time for both staff and management, as rumours can fly and morale plummets. It’s the responsibility of the employer to inform all potentially affected staff of the plans as early as possible, and to explain clearly the reasons why it’s happening.
But employers aren’t alone, HR can now assist managers in the painful task of breaking the bad news. Most large organisations in both private and public sectors have redundancy policies stating how consultations with staff and their representatives should be handled, so make sure you look in your contract.
Consultation is a crucial right for every endangered employee, and it exists whether it’s just you being made redundant or hundreds of staff. Employers have to show they’ve explored every route to avoid job-loss.
They have to clearly explain the criteria they’ve used for selecting those being made redundant, and be open to discussion on it. They also have to discuss ways of helping people find new work (ie by offering to help with re-training).
Statutory consultation periods can vary. If more than 20, but less than 99 people are to go, consultation has to begin at least 30 days before the first dismissal takes effect. Where 100 or more staff are involved, they have to begin at least 90 days before the crunch date.
What happens next?
No-one can be made redundant until they’re individually issued a formal notice of redundancy, and the periods set down for these are the same as any other type of dismissal. This is one week for staff engaged between a month and two years, then one week for each year of employment, up to 12 weeks for someone employed more than 12 years. During your notice period you’re entitled to paid time off to find new work and attend job interviews.
If you’ve been working for the same employer for two years or more you will be entitled to at least the minimum statutory redundancy pay, which is tax free up to £30,000. To find out how much you are entitled to as a minimum, check the calculator on the gov.uk website.
Was it fair?
If you suspect that your redundancy is in any way unfair, you can appeal the decision and ultimately take your employer to an employment tribunal for unfair dismissal.
If you belong to a trade union, they’re usually a good first port of call in such cases. Another is ACAS, the Advisory, Conciliation and Arbitration Service, who can provide information and advice.
Beyond these, there’s a network of legal advice centres around the country. Find your nearest one.