Employment Law About Redundancy

Although employment law affects everyone in the workforce, it is arguably the most complex and most frequently changed area of law.

Redundancy can sometimes be a grey area, and the law specifies that an employee can be dismissed by reason of redundancy only if the decision to dismiss the employee is based on the employer being required to reduce the workforce for a justifiable motive.

Acceptable reasons to reduce a company's workforce include the the termination of the position previously held by the employee, the need for the company to cut costs, the business closing down or moving and/or the introduction of new technologies and systems into the company, thus making the employee's job unnecessary.

The reason this can be a grey area is because sometimes, an employee can be made redundant based on another employee taking over their colleague's job due to the termination of the position they previously held.

Another grey area can be found in the case whereby a company that decides to relocate obliges their employees to move. For employees unwilling to move, there is a fine line between resigning and being made redundant. Employees who have a mobility clause in the work contract can be forced to move within reason. Employees who decide not to move and do not have a mobility clause in their contract could be made redundant.

Employers making 20 or more employees redundant within a 90 day period are said to be making a collective redundancy. Employers are obliged to consult with employees' trade union officials or a representative elected by the employees. Failure to consult with a representative could result in a claim to an Employment Tribunal for a monetary award of up to 90 days pay.

Individual redundancies occur when less than 20 employees are made redundant. Redundant employees should be selected fairly, warned in advance and paid a fee for being made redundant. Employers are obliged to consider any alternatives to redundancy and take appropriate steps to redeploy affected employees.

Employees who have worked for their employer for at least two years have a right to redundancy payment. Short-term and temporary employees who have been laid off for more than four consecutive weeks or six consecutive weeks, in the case of 13 week long employments, also have a right to redundancy pay. Employees not given the appropriate notice period of redundancy, are also entitled to receiving a notice pay. It is important to note that employees, who refuse an alternative job in the company, do not have a right to redundancy payment.