If you have been notified that you may be made redundant or (if you’re an employer) think that you may need to make redundancies then the there are two things that must be considered. Firstly, what rights the employee has in a redundancy situation and, secondly, how the redundancy procedure should be conducted to prevent employees being unfairly dismissed. Although the two elements very much intertwine (for example, the employee has the right not to be unfairly dismissed which provides the motivation to conduct a fair redundancy procedure) they will be considered separately in the next two articles. The first article will consider the employee’s rights and the second will consider how a fair redundancy procedure should be carried out.
The employee’s rights
1. Redundancy payment
Firstly, the employee has the right to receive a statutory redundancy payment after two years continuous employment with their employer. The amount of redundancy pay due is calculated with reference to the particular employee’s age, their length of service, and their gross weekly wage (with a cap of £400).
However, if the employee has an implied or express contractual entitlement to redundancy which is greater than the statutory minimum then the employee may be due to receive this. An implied right to redundancy pay can accrue through custom and practice on behalf of the employer with previous employees in similar situations. An express right would be oral or written (although it’s obviously better to record such entitlement in a written document as its eminently possible to dispute an oral term).
Should the employer be unable or unwilling to pay the employee’s redundancy pay then the employee should apply to the National Insurance Fund for their statutory entitlement and any other payments they are eligible for. Such payments may include holiday pay , compensatory notice pay, and potentially unpaid pension contributions. This is done through the RP1 form available here.
2. Right not to be unfairly dismissed
If you have one year’s continuous service then you have the right not to be unfairly dismissed. Your employer’s decision to dismiss you must therefore be based on both a reasonable decision in the circumstances and be premised upon a proper redundancy procedure. If you believe that your employer’s decision to dismiss you wasn’t a genuine one or that it was based upon a flawed procedure then you should obtain legal advice as you may have grounds for issuing an Employment Tribunal claim.
3. Ancillary rights
You have the right to receive statutory minimum notice of your dismissal, should you qualify for such. However, if you have a greater contractual entitlement than the statutory minimum to notice then you are entitled to this.
Further, you have the right to have time off to look for work should you have two year’s employment with your employer. Allied to this, you have the right to time off to look for training opportunities for prospective or actual new roles.
As can be seen from the above, employees have substantial (and substantive) rights in a redundancy situation. Failure to recognise and comply with these rights may lead to legal action. It is therefore in the interests of both employers and employees to educate themselves on these and prepare properly for any redundancy situation.