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Redundancy Claims
If you have been dismissed by reason of redundancy, and are entitled to a statutory redundancy payment, but not paid it by your employer, you can claim a statutory redundancy payment from an Employment Tribunal. You may also be entitled to receive contractual enhanced redundancy payment if your employer offers this provision over and above your statutory entitlements. To make a claim for statutory redundancy payment, you must have two years' continuous service and have been dismissed. You have six months to present a claim for redundancy pay. However, if you think the selection process was unfair or unreasonable then you only need one year's continuous employment in order to bring claim for unfair dismissal, but you must present your claim within three months. If the redundancy is not carried out in a fair manner or with adequate consultation, then you can bring a claim for unfair dismissal. If you have a contractual redundancy clause in your contract you may also bring a claim for wrongful dismissal. What is consultation? An employer must consult with employees about any proposed redundancies. If the employer is making 20 or more redundancies at one establishment within a 90-day period or less, the employer must consult with a trade union (or, if the employer prefers, elected employee representatives) at least 30 days before the dismissals take place. If 100 or more redundancies are proposed within a 90-day period, then the consultation must begin at least 90 days before the dismissals take place. Failure to comply with these requirements will mean that each affected employee is able to bring a Tribunal claim for up to 13 weeks' pay and it may also mean any dismissals are unfair. When is a selection pool required? The employer must decide whether it is appropriate to identify a "pool" of employees to select employees from. In making the decision, the employer needs to look at which employees' jobs are similar; interchangeable skills, etc. If the employer gets the pool wrong, by including or excluding the wrong people, the redundancy can be considered to be unfair. If a pool is identified, the selection procedure can be based on a scoring process, with the employer giving points to employees based upon objective criteria, which is discussed and agreed with the employee. What is alternative employment? The employer must consider alternative employment before declaring an employee redundant. The first 4 weeks of any new job should be treated as a trial and if the employee leaves within this period they can still claim redundancy payments providing it is not unreasonable. How is redundancy pay calculated? The redundancy payment under the statutory redundancy payment scheme depends on age and length of service (up to twenty years). This determines the number of week's pay due, which is then subject to a limit on weekly pay. To calculate the number of weeks pay due, use the following amounts -
If you are aged 25 with 7 years service, you will be entitled to 5 weeks' redundancy pay. The 5 weeks entitlement is based on 0.5 weeks' pay for each completed year of service between age 18 and 22 and 1 week's pay for each completed year of service between age 22 and 25. (The middle band of 1 weeks' pay only applies where an employee, who is entitled to a redundancy payment, has completed a year's service at age 22 or above). The maximum week's pay that an employee is entitled to under the statutory scheme is set by the government and changes every February. When is a redundancy unfair? The first example is when the reason for dismissal was not a genuine redundancy situation. The second is when, although there is a redundancy situation, there was inadequate consultation, unfair selection or no alternative employment considered. |
