‘Your Business is Our Business’
As an experienced UK employment lawyer, I understand the challenges that employers, business owners and managers face when navigating redundancy employment law. Redundancy is a complex area and it’s vital to be informed to make the right decisions. This article covers key aspects of redundancy employment law and offers guidance on how to stay compliant and protect your business.
Redundancy occurs when an employee’s job is no longer required for various reasons. It could be a business closure or relocation, technological advancements, economic downturn, restructuring or reorganization. The purpose of redundancy is to allow businesses to adapt to changing market conditions and remain competitive. However, employers must follow strict legal guidelines to ensure fair treatment of affected employees..
Compliance with redundancy employment law is crucial. Employers should aim to minimize legal risks, maintain a positive reputation and ensure smooth transitions. Non-compliant redundancies may lead to costly claims, such as unfair dismissal or discrimination. Fair treatment of employees reflects well on your business, attracting talent and customers. Properly executed redundancies can minimize disruption and maintain morale among remaining employees.
The Employment Rights Act 1996 sets out the legal framework for redundancy. Some of its key provisions include notice periods, redundancy pay and consultation. Employers must give employees adequate notice before redundancy takes effect. Eligible employees are entitled to statutory redundancy pay based on age, length of service and weekly earnings. Employers must consult with employees or their representatives before making final redundancy decisions.
During the redundancy process, employers must avoid discrimination, ensure objective selection criteria, avoid protected characteristics and provide reasonable adjustments. Employers should use fair, unbiased criteria when selecting employees for redundancy. Decisions must not be based on age, sex, race, disability, religion or belief, sexual orientation, gender reassignment, marriage or civil partnership, or pregnancy and maternity. Employers must accommodate employees with disabilities during consultations and decision-making.
When planning to make 20 or more employees redundant within 90 days, employers must carry out a collective consultation. This involves informing employee representatives and providing written details of the proposed redundancies. Consultations must begin at least 30 days before the first redundancy (45 days for 100 or more redundancies) and continue for as long as necessary. Employers should keep accurate records of consultations to demonstrate compliance.
Regardless of the number of employees involved, individual consultation is essential. This allows employees to discuss their concerns and understand the reasons for their selection. Employers should provide clear and transparent information about the redundancy process and be open to employee suggestions. Individual consultations also demonstrate that employers value their staff and promote fairness.
To avoid potential discrimination claims, employers should use objective criteria when selecting employees for redundancy. Examples of objective criteria include:
Before applying the selection criteria, employers should identify a pool of employees from which redundancies will be made. The pool should be determined based on the specific needs of the business and the roles being made redundant.
Employers have a legal obligation to consider offering suitable alternative employment to employees facing redundancy. Failure to do so may result in an unfair dismissal claim. Employers should offer suitable alternative employment before the employee’s original job ends and the new role should commence within four weeks of the original role’s termination.
Factors to be considered when assessing whether an alternative role is suitable:
Eligible employees are entitled to statutory redundancy pay based on their age, length of service and weekly earnings. The amount is calculated as follows:
Employees are entitled to a minimum notice period before their employment is terminated due to redundancy. The notice period depends on the employee’s length of service:
Clear communication and transparency throughout the redundancy process is crucial. Employers should explain the reasons for redundancy, the process and the support available to affected employees. This can help reduce anxiety, maintain morale and minimize potential disputes.
Outplacement support is a valuable tool for helping redundant employees transition into new roles. Services can include:
Investing in outplacement support not only benefits redundant employees but also demonstrates your business’s commitment to fair treatment and employee welfare.
Understanding and adhering to redundancy employment law is essential for employers, business owners and managers. By following the legal framework, maintaining open communication and offering support to affected employees, you can minimize legal risks, maintain your business’s reputation and ensure a smoother transition for both the organization and its employees.
Call John Bloor at EBS Law on 01625 87 4400 if you are an employer and need free advice on Redundancy Law.