Making redundancies can be a difficult decision but it is a necessary step at times to ensure the ongoing success of your business. Specific laws and regulations protect the rights of employees at risk of redundancy and those made redundant to make sure they are treated fairly. While these laws and regulations protect all employees to some extent, an employer’s obligations in respect of redundancy under 2 years differs from those relating to employees who have been employed for longer.
Call us now on 01491 598 600 or email us on cw@gaphr.co.uk and we will be delighted to help you.
What Is Redundancy?
Redundancy is a form of employee dismissal. However, it does not result from any wrongdoing on the part of the employee but rather from the fact that their employer no longer needs them to do the job for which they are employed.
Examples of business situations that might give rise to redundancies include the following:
- A downturn in business which has left the business with financial difficulties.
- The business is pursuing other avenues for which the employee’s skill set is not required.
- New technology has rendered the employee’s role obsolete.
- The business is relocating.
- The business is restructuring.
Before embarking on any redundancy process, it’s crucial to ensure that the situation is one of genuine redundancy. If the issue relates to an employee’s behaviour or performance, you cannot make them redundant. Instead, you must address the matter in accordance with your organisation’s policies governing those issues. Speak to us if you are unsure. Our expert HR advisors will consider the circumstances, review your contracts of employment and policies, and advise on the best way to achieve your aims whilst staying within the law.
What Rights Do Employees At Risk Of Redundancy Have?
The extent of an employee’s rights depends on how long they have worked for you. As a general rule, employees with more than 2 years’ service have greater protection than those who have been with you for less time.
• Redundancy – Employees With More Than 2 Years’ Service
Employees with more than 2 years’ continuous service are protected by unfair dismissal laws. This means that failing to follow fair redundancy procedures in your dealings with them may expose you to Tribunal proceedings for unfair dismissal.
Furthermore, any employee with more than 2 years’ service is generally entitled to statutory redundancy pay based on their age and length of service, up to a maximum of £21,000. The only exceptions are when you offered to keep the employee on or suggested a suitable alternative role, which they turned down.
• Redundancy – Less Than 2 Years’ Service
In contrast to employees with more than 2 years’ service, those who have been working for your organisation for less than 2 years are not protected by unfair dismissal laws. As a result, they cannot bring an unfair dismissal claim against you for failing to follow a fair redundancy process unless your reasons for choosing them were ‘automatically unfair’.
Automatically unfair reasons include the following:
- Reasons relating to maternity or paternity.
- They sought to exercise a statutory right.
- They are involved with a trade union.
Crucially, you can still make staff members redundant if one of the situations classed as being ‘automatically unfair’ applies to them; it just can’t be the reason for their dismissal.
In addition, employees with less than 2 years’ service are not entitled to statutory redundancy pay. You may still need to pay redundancy if you operate enhanced redundancy packages that extend to all employees, so checking the employee’s employment contract and any other policy documentation is crucial.
How Should An Employer Deal With Redundancy Under 2 Years?
Despite employees with less than 2 years’ service enjoying somewhat limited legal protection, it is best practice to follow a fair redundancy procedure in all cases. If you don’t, the employee may allege that you selected them for redundancy by virtue of an automatically unfair reason, such as pregnancy, and bring an automatic unfair dismissal claim against you. Without evidence proving the fairness of your selection criteria and process, defending such a claim may prove a challenge.
If you are considering making redundancies within your business, our specialist HR and employment law advisors are on hand to support you through the process. Clients often comment on the ‘clear, concise’ advice they received from our ‘awesome’ team, who they consider an ‘invaluable source of expert Employment Law advice’. With us by your side, you can be confident that your redundancy processes will be fair and lawful, and your chances of facing Employment Tribunal proceedings will be significantly reduced.
Call us now on 01491 598 600 or email us on cw@gaphr.co.uk and we will be delighted to help you.
