What are my rights if I get made redundant?
PUBLISHED: 09:48 11 July 2020 | UPDATED: 09:48 11 July 2020
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The Covid-19 crisis has put huge pressure on businesses across Suffolk, so much so that many are having to make difficult decisions about redundancies. But what happens if you find yourself at risk?
Redundancy is a situation many might never have found themselves in before - and it will come as a shock to the system.
Before the start of this year, coronavirus was barely being talked about.
Since then, the crisis has turned the world upside down - with major firms such as John Lewis and Burger King confirming jobs are at risk, as well as many companies locally.
There are fears that once the government coronavirus job retention scheme ends, more people will find themselves out of work - but what should you do if you find yourself in that situation, and what are your rights? Here, Charlotte Bate - director of MAD-HR, which provides human resources services to employers in Norfolk, Suffolk and Essex - gives a run-down of how the process works.
What is redundancy, and why do companies do it?
Redundancy is when an employee is dismissed due to the following reasons:
■ The organisation or part of the organisation is closing or moving location
■ It is changing what it does
■ It is doing things differently - for example, because of technology or work practices, or there is a reduction in demand, resulting in a reduction in the number of employees needed
Redundancy is not a way to dismiss a problem employee or one with performance issues - that is what the disciplinary or capability procedure is for.
Why have I been selected for redundancy?
There are a great many reasons why organisations are faced with the prospect of having to consider redundancies.
It does not always equate that less work means fewer people. It may be the case that costs need to be reduced, therefore those staff remaining may be required to share a larger proportion of the work.
In any case, your employer will need to be able to justify the reasons for proposing redundancies and these must be clearly communicated to all affected employees.
In terms of selection, again, your employer must clearly communicate why certain roles are being ‘pooled’ as part of the selection process for redundancy - whether this be the only person carrying out a particular role or multiple people carrying out the same or similar roles.
When a number of staff are being selected for redundancy, your employer must ensure that the basis for selection is fair and does not unfairly discriminate against you.
For example, you can’t be selected for redundancy on the basis of your age, race, religion or any other discriminatory factor, such as being on maternity leave.
I’ve been told my job is at risk. What is the procedure?
If you have been told that your role is at risk, your organisation should have communicated the business reasons for this.
They will have identified a ‘pool’ of employees who are at ‘risk of redundancy’, if there is more than one person undertaking a similar type of work.
In which case, all those employees will be put ‘at risk’ and it is from that group that a selection will be made.
If there is only one person, there will be in a ‘pool’ of one.
Meaningful consultation must take place. The length and type of consultation required will be determined by the number of those being made and the timescale within which the redundancies are going to happen.
In the event your employer is making more than 20 or more employees redundant, this is known as collective redundancy.
If there are more than 20 people to be made redundant within a period of 90 days, then the employer must consult with the “appropriate representatives” in the first instance,.
Once this process is underway, it can then begin consulting individually.
The consultation must begin in “good time”. However, legislation does specify certain minimum periods for which the consultation must last.
■ If the proposal is to dismiss 100 or more employees at one establishment within a period of 90 days or less, the consultation must begin at least 90 days before the first dismissals take effect.
■ Otherwise, the consultation must begin at least 30 days before the first dismissals take effect.
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The duration of the consultation process and the number of consultation meetings required can vary on a case by case basis, depending on a range of contributing factors.
Before a decision is made, an organisation must have fully considered alternatives to avoid compulsory redundancy, which could involve other vacancies, changes in working hours, working practices and voluntary redundancies.
At the final ‘decision’ meeting, you will have the right to representation - either a work colleague or trade union representative - along with the right of appeal against the decision.
Could my employer offer me another job?
As an alternative to compulsory redundancy, your employer may offer you an alternative job.
However, it is up to the employee to decide whether the alternative work is suitable. This will be dependant on a number of factors, such as whether there is a different rate of pay, hours of work, a different location, status etc.
Employees who unreasonably refuse an offer of suitable alternative employment may lose any entitlement to redundancy pay.
If, however, the employee wants to accept a new role where the provision of the contract differs, they are entitled to a trial period of four weeks in the role.
This gives the employee and employer a chance to decide whether the new job is suitable, without necessarily losing the right to a redundancy payment.
I disagree with my employer’s decision. Can I appeal?
As an employee, you can appeal against being made redundant if you believe you were unfairly selected or your employer did not follow a fair redundancy process.
If this is the case, you should refer to your organisation’s redundancy procedure, which should set out how to lodge an appeal and the time frame within which this needs to happen.
If there is no such procedure, you can write to your employer explaining why you think the redundancy is unfair.
Your employer will then arrange for an appeal hearing at which you will have the right to be accompanied by either a work colleague or an official trade union representative.
How much notice does my employer have to give me?
Once you are advised that your employment will end due to redundancy, then employees are entitled to be given a certain period of notice to bring their employment to an end by their employer.
Your contract of employment will normally specify the notice period. If it does not, a “reasonable” period will be implied into the contract.
In either case, the period of notice must be the greater of either the statutory minimum notice period or the contractual notice period (from employer to employee).
Where the employee has been employed for at least a month but less than two years, the statutory minimum notice is one week.
After two years’ service, this rises to one week for each year of continuous service, up to a maximum of 12 years - which equates to 12 weeks’ notice.
There are occasions where you may be paid this in lieu of notice or you can be asked to work it.
In the current circumstances, we would expect that anyone being made redundant during the furlough arrangement will be kept on furlough for their duration of their notice period.
What redundancy pay am I entitled to?
It is worth checking your company policy, as some employers pay an enhanced redundancy payment.
However, if this is not the case, you’ll normally be entitled to statutory redundancy pay if you’re an employee and you’ve been working for your current employer for two years or more.
If you were made redundant on or after April 6 2020, your weekly pay is capped at £538. However, this amount will be lower before this date.
For each complete year of service, up to a maximum of 20 years, employees are entitled to:
■ For each year of service under 22, half a week’s pay*
■ For each year of service at age 22 but under 41, one week’s pay*
■ For each year of service at age 41 or over, one and a half weeks’ pay*
* or £538, whichever is the lower amount.
To check what you are entitled to, visit https://www.gov.uk/calculate-your-redundancy-pay
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