Compassionate Redundancy Solicitors
Consulting a solicitor when your employer is making redundancies can be crucial to ensure that your rights are protected and the process is conducted fairly. We can help you understand if the redundancy is genuine, advise on whether the correct procedures and consultations have been followed, and ensure you receive any entitled redundancy pay.
To get the support you need, call 0151 236 8871 or book a call with our legal experts.
What is the redundancy process?
A fair redundancy process will be one which follows the guidance set out by ACAS and which complies with the employer’s legal obligations to consult with employees or their representatives. For example, where an employer is intending to dismiss 20 or more people from the same establishment within a 90 day time period, there is a duty to consult with trade unions or elected employee representatives.
Even where there is no such duty to carry out collective consultation, an employer must still consult with individuals over ways in which redundancies could be avoided. A failure to do so could result in the employee successfully bringing a claim to an employment tribunal for unfair dismissal.
How much redundancy will I get?
Statutory redundancy pay is worked out using a formula based upon an employee’s length of service, age and salary at the date they are made redundant. There is a cap on a week’s pay for the purposes of this calculation. Currently, the upper cap on a week’s pay is £700.
This therefore means that the maximum amount that an individual could obtain under statutory redundancy pay, as things stand, is £21,000. This would apply to somebody who was 61 years old or older, who was earning at least £700 a week before tax and who had continuous service of at least 20 years.
An employee with under two years’ continuous service is not eligible for statutory redundancy pay.
Some employers choose to make a payment to an employee over and above the statutory amount for redundancy pay. For example, an employee may have a right under their contract to an enhanced redundancy payment in the event that they are made redundant. This is less common these days but nevertheless should still be checked.
When are you entitled to redundancy?
Employees are entitled to statutory redundancy pay in circumstances where their employment is terminated by reason of redundancy. This sounds fairly straightforward.
However, the situation can become more complex in circumstances where the employer argues that they have offered the employee suitable alternative employment and that the employee has unreasonably refused that offer. In cases such as this, the employer may refuse to make a statutory redundancy payment to the employee because of the employee’s unreasonable refusal of suitable alternative employment.
What amounts to an offer of suitable alternative employment depends on the circumstances of each case. Equally, it is subjective as to when it might be reasonable for an employee to refuse the offer.
When should I receive my redundancy payment?
An employee will be entitled to receive their redundancy pay following the termination of their employment. The payment will be made tax-free on the basis that it is under £30,000 and is a genuine payment upon termination of employment.
What is voluntary redundancy?
An employer may propose to make redundancies but ask for volunteers for redundancy. Sometimes they will try to offer an incentive for individuals to volunteer by offering to pay an amount over and above the statutory minimum. This will often be accompanied by a requirement that anybody successfully volunteering for redundancy ultimately signs a settlement agreement under which they would agree not to pursue claims against the employer moving forward.
ACAS approves of employers offering voluntary redundancy prior to implementing compulsory redundancies. However, this can sometimes create problems for employers who do not want to lose particular individuals from the workplace. An employer who invites volunteers for redundancy may risk losing some particular individuals they do not want to make redundant or risk unsettling employees who are not themselves at risk of redundancy.
An employer is not legally obliged to accept an employee’s request for voluntary redundancy. However, this can then cause dissatisfaction amongst staff members if somebody volunteers for redundancy and is refused. It can also make the process look more like a sham if other employees are then compulsorily made redundant when individuals who had volunteered were refused redundancy.
What is statutory redundancy?
A statutory redundancy payment is one that is worked out using the statutory redundancy formula (see above). It is the minimum that can be paid to an employee who is being made redundant.
In addition to redundancy pay, an employee may also be entitled to statutory notice pay, as they are within their rights to receive notice of redundancy in line with their statutory notice entitlements. Sometimes contractual redundancy entitlements and contractual notice entitlements go beyond what is set out as the statutory minimum provisions.