Redundancy

In plain English, this means that the amount of work of the particular kind that is carried out by you may have stopped or is intended to stop in the near future. This work may be stopping for good, or only in the actual place where you are employed. In either case, if your employer can prove this, then the test of redundancy will generally be met. The test of redundancy will also be met where the type of work you carry out is not necessarily stopping, but your employer does not need as many people to carry it out (for example due to an increased use of technology, or due to outsourcing).

MSRS-Expert redundancy legal advice

Redundancy occurs where your dismissal is:

  • wholly or mainly attributable to the fact that your employer has ceased or intends to ceaseto carry on the business for the purposes of which you were employed, or in the place where you were employed; or
  • the fact that the requirements of your employer for employees to carry out work of a particular kind, or for employees to carry out work of a particular kind in the place where you were employed have ceased or diminished or are expected to cease or diminish.

Examples of when someone may be genuinely redundant include:

  • The work the person does is no longer needed due to a downturn of business, a new line of work which requires a different skill set, or a new process being introduced.
  • The employee’s job no longer exists because the work is being done by other employees.
  • The workplace has closed because the employer has ceased trading or has become insolvent.
  • The employer’s business, or the work the person is doing, moves to another location.
  • The employer’s business is transferred to a different employer.

Even if there is a genuine redundancy situation, your employer must still follow a correct redundancy process (see below) failing which the redundancy can still be deemed to be an unfair dismissal.

Examples of Non-Genuine Redundancy Situations?

Employers often claim that there has been a reduction in the work needing to be done, but this is not always the real reason for dismissal. It can be cheaper and less time consuming to label someone “redundant” rather than follow, say a performance process that could take many months. It may be that an employee is simply disliked, with redundancy being used as an excuse to fast track that person’s exit from the company. It is important to look at all the circumstances surrounding the redundancy. The following are examples which may indicate that the redundancy is not genuine:

  • If your employer has recently taken on other people or intends to do so in the near future.
  • If you have been criticised about your performance and subsequently face a redundancy situation, this may indicate that your dismissal is more about your poor performance than a genuine redundancy.
  • If you are the only person being made redundant, or one of only a few in a large company.
  • If you are pregnant, because of your gender, from an ethnic minority, disabled, gay or of a particular religion, this might indicate you have been dismissed because of discrimination rather than because of a general need to reduce the workforce.
  • If you have had a poor relationship with your line manager, this might indicate you have been dismissed for a reason other than a genuine redundancy one.
In a correct redundancy process, the following needs to happen:
  • There needs to be a redundancy situation.
  • Relevant employees who are likely to be affected by the redundancy need to be identified.
  • Your employer should identify which individuals in management will be selecting those who are potentially to be made redundant. That person, or persons should be familiar with the work, skills and qualifications of the employees who could be made redundant.
  • A selection criteria for who may be made redundant should be drawn up, together with a selection pool of affected employees carrying out similar work. The selection criteria needs to be transparent and objective and often relate to performance and skills.
  • Once your employer has completed the selection criteria and identified the pool, it should undertake the selection process and invite each employee to an individual meeting to discuss whether or not they have been provisionally selected for redundancy. If you have been provisionally selected for redundancy, you face a real possibility of being made redundant by your employer. This is often the first time that you will have been notified that redundancy could be an option, and that you are “at risk”. You will usually be given confirmation of this in the form of a letter, and employers should make clear that no decision has yet been taken (and that you are therefore not dismissed at that stage).
  • You should be allowed an appropriate time to reflect and remark on your provisional selection, and you will enter a period of consultation. 
  • Your employer will score each employee against the  selection criteria (your skills/performance etc), and a matrix may be drawn up for this purpose.
  • Your employer should consider whether there is any suitable alternative role for you and should also consider if “bumping” a more junior member of staff is appropriate so that you can fill his or her role (and that person who is bumped then is made redundant instead).
  • Ultimately, your redundancy will either be confirmed or you will be told that your job is safe. If redundancy is confirmed, you will be informed of your redundancy pay together with other termination payments and arrangements. Normally you are considered a “good leaver” for the purposes of shares, stocks or deferred compensation if you are made redundant. You might be asked to sign a Settlement Agreement.

Appeal

There is no statutory right to appeal your redundancy. It is, however, good practice to be offered such a right. If your employer has a contractual dismissal policy which provides for an appeal, then this should be followed.

For more information on Redundancy or to discuss your situation at work, please contact us.