Redundancy and unfair dismissal claims advice for employees

As the country continues to ease its way out of lockdown, businesses up and down the country are having to make difficult decisions regarding their businesses and staffing levels.

In this article we look at the topics of redundancy and unfair dismissal.

Redundancy Redundancy is a potentially fair reason to dismiss an employee. An employee is dismissed by reason of redundancy if the dismissal is wholly or mainly attributable to the fact that:

• The employer ceases to carry out business in which the employee was employed.
• The employer ceases to carry out that business in a place where the employee was employed.
• The needs of the business for the employee to carry out work of a particular kind cease or diminished.
• The needs of the business for the employees to carry out work on a particular place where the employee was employed ceased or diminished

This can be summarised as follows:

• “business closure”
• “workplace closure”
• “reduced requirement for employees”

If there is a genuine redundancy situation an employer will also need to follow a fair redundancy process.

In order to consider which employees are at risk of redundancy, your employer will need to identify the pool of possible employees at risk before scoring those at risk against a selection criteria/matrix. A selection criteria should be objective rather than subjective.

A potentially fair selection criteria could include:

• Performance and ability.
• Length of service.
• Attendance records.
• Disciplinary records.

Employers must consult with affected employees individually. If your employer is planning to make over 20 employees redundant in a 90-day period, they are obliged to consult collectively with employees. This is called collective consultation. An employer will need to consult representatives from the Union, or if there is not a Union then with a representative for the employee who has been duly elected. Group consultation must start at least 30 days before anyone’s job ends. If 100 or more people are being made redundant, group meetings must start at least 45 days before anyone’s job ends.
An employer’s failure to undertake collective consultation can lead to an employment tribunal awarding up to 12 weeks’ pay per employee. This is called a protective award.

As part of the consultation process, an employer should discuss with employees why they need to make redundancies, why they’re considering the employee for redundancy, what other jobs are available and to answer any questions that the employee may have. Employees should have an opportunity to challenge the scoring as part of the consultation process.

If an employee accepts an offer of alternative employment, it might be subject to a 4-week trial period. Employees should note that if the employer refuses to allow the trial period, any subsequent redundancy dismissal could be unfair.

An employee should have the right to appeal an employer’s decision to dismiss.

Employees with at least 2 years’ continuous employment are entitled to a Statutory Redundancy Payment. This is calculated according to age and length of service and subject to a week’s pay capped at £538. An employee will also be entitled to their notice pay and any accrued but untaken holiday.

Employees should note that there are some instances where they could lose a right to a statutory redundancy payment for example where an employee turns down a suitable alternative job offered by their employer without good reason.

Some employers may offer enhanced redundancy terms, which are normally contained within a document referred to as a Settlement Agreement. If your employer provides you with a Settlement Agreement, you will be advised that you will need to take independent legal advice on the terms and effect of that document. Your employer should be contributing towards your legal costs in order for you to obtain that advice.

Unfair dismissal 

An employee with more than 2 years’ service has the right not to be unfairly dismissed.

Whilst an employee with less than 2 years’ service does not have the right to claim ordinary unfair dismissal, they should still check to see if they have been discriminated against on a protected ground such as race, sex or disability. Further, an employee may have a claim for automatic unfair dismissal, where a dismissal is at least partly because, for example an employee has made a protected disclosure (whistleblowing), has raised or taken action about health and safety, or has raised concerns in respect of minimum wage, holidays or maternity leave. If this is the case, then the 2 years requirement does not apply.

If you have a reason to challenge your dismissal, you may be able to make a claim at the Employment Tribunal for unfair dismissal or discrimination. There are strict time limits in which you need to pursue matters and as such employees are encouraged to take advice at the earliest opportunity. An employee will need to commence ACAS Early Conciliation within 3 months from the effective date of their employment terminating. For example, if you are dismissed on the 14 July 2020, you will need to have commenced ACAS Early Conciliation by 13 October 2020. If matters cannot be resolved at the ACAS Early Conciliation Stage, an employee will have no less than a month to issue a claim at the Employment Tribunal following receipt of the ACAS Early Conciliation Certificate.

More information

If you have been dismissed or are currently going through a redundancy process, then please feel free to contact our Employment Team who will be happy to assist..

The above is meant to be only advice and is correct as of the time of posting. This article was written by Alex Pearce, Senior Associate in the Employment Law Team at Pinney Talfourd LLP Solicitors. The contents of this article are for the purposes of general awareness only. They do not purport to constitute legal or professional advice. Specific legal advice should be taken on each individual matter. This article is based on the law as of July 2020.