Redundancy: Legal Guide Knowing your rights

Darren Clayton, Founding partner of Doyle Clayton Solicitors, the UK's largest employment law firm

Darren Clayton
Darren Clayton

Definition Redundancy is when the employer's need for someone to carry out all or a significant part of your role has ceased or diminished. It relates to the role and not the person.

Contractual obligations The first thing to do is check your employment contract. You should always be paid for your notice period - although you may have to work it. Sometimes employers reserve the right to pay you in lieu of notice but you cannot usually demand this. You should also check to see if you have an extra contractual redundancy scheme in place, for example, one where you get one month's pay per year of service rather than the statutory minimum.

Redundancy pay For most people, provided they have worked for more than two continuous years, they get statutory redundancy pay. This is one week's salary (capped presently at £380) per year of service, in addition to your notice period. For any year of work completed when you were 41 years of age or older, you will have this paid at 1.5 times a week's salary.

Unfair dismissal If you have been at a firm for more than a year, you have a right not to be unfairly dismissed. This means that not only should the redundancy be genuine, but the employer has also followed a fair process, generally worked out by what can be expected of a reasonable employer. In general terms, the firm should warn you that you are at risk and give you a consultation period. If it needs to choose between people at the same or a similar level, it will need to adopt a sensible matrix of objective factors rather than just choosing who it likes most. It should search for, and offer if found, a suitable position for someone with your experience elsewhere in the company. If you have been offered a suitable alternative job and you unreasonably refuse, you may lose your right to statutory pay.

If your are unfairly dismissed, you can go to a tribunal and get an award of compensation essentially based on 'loss of earnings' - in addition to your statutory pay. If successful, you will receive a sum that the tribunal deems just and equitable, usually based on the length of time you will be out of work, capped at £65,300. You would, though, have a duty to look for another suitable job following your redundancy and to minimise your loss. Most awards are considerably lower than the maximum. You do not need a lawyer to go to a tribunal, but statistically you are less likely to win.

However, you do not have your fees paid by the other side even if you win.

Discrimination If there is any discrimination in the selection criteria for who has been made redundant, or in the reason why someone was made redundant, then there is no cap on the compensation award and your unfair dismissal claim could be joined by one for unlawful discrimination. With that claim, you could also claim losses for injury to feeling up to £25,000, though often less, and aggravated damages, usually up to £5,000.

Have you registered with us yet?

Register now to enjoy more articles and free email bulletins

Already registered?
Sign in