Correct redundancy procedure explained
If you find yourself in a redundancy dispute with your employer it is important to be armed with the information that you need to know whether or not the redundancy is fair. If the redundancy is not fair then it could amount to an unfair dismissal in breach of the Employment Rights Act 1996.
This guide helps you to work out whether or not you are being treated fairly in your redundancy dispute. If you find your redundancy has been made unfairly, then you could be entitled to more compensation from your employer. This is where our expertise as employment lawyers comes into play. Use the questions below as a guide to help you ascertain whether or not your redundancy was fair, and then get in touch with us to discuss how you could try to increase your settlement agreement. You might also like to have a look at some of the other relevant guides on our website, links to which are provided below.
Top TipsChris Hogg
Consider if there is a genuine business reason your role is going
Make sure your employer has considered making redundant others doing the same role
Ensure your employer seeks alternative roles for you
Is there a genuine redundancy situation?
In order for the redundancy to be fair, there has to actually be a genuine redundancy situation. A redundancy situation occurs when a business or workplace closes or when there is a ‘diminished need for work of a particular kind.’ Unfortunately, the latter is often broad enough to cover the situation where an employer restructures the business.
For example, your employer might decide to merge two roles into one or divide the work amongst other staff. However, if you are dismissed for ‘redundancy’ and then your employer recruits someone to do the same job that you were doing, then that doesn’t look like a genuine redundancy situation.
An employment tribunal will not get involved with whether a decision to make redundancies was sensible, only whether it was genuine. You might think that the decision to make you redundant is really bad for the business and will result in lost revenues, but that is not the test for the employment tribunal unfortunately.
Is the selection pool for the redundancy fair?
One of the ways that an employer can come unstuck in a redundancy dispute is in relation to who they decide is at risk of redundancy, in other words, choosing the ‘selection pool’ for redundancy.
If there are other people doing the same job as you then they should also be in the selection pool for redundancy. It becomes more complicated though when there are people who are not doing the same job but where the roles are interchangeable or the skills set for the jobs are similar. In those circumstances you should be arguing that the selection pool should include those roles as well. Remember, the bigger the selection pool, the less likely it is that you will be selected for redundancy.
In addition, in some circumstances in a redundancy dispute an employer should consider ‘bumping’. This means making a more junior employee employer redundant and you taking their job instead.
Were the selection criteria objective and fairly applied?
If there are a number of people in the selection pool for redundancy, your employer has to set selection criteria for determining who should be made redundant. This could be things like attendance, punctuality, skills and experience.
Things like attendance can be checked against HR records so are easily verified. Things like skills and experience are more subjective and are often based on the opinion of the person scoring you. In those circumstances, your employer should be able to back up their scores, for example, by looking at past appraisals or peer reviews. If your employer has no basis for their scores, then your redundancy may be unfair.
Sometimes employers will hold interviews to decide who will be made redundant. They are allowed to do this, but again they should be able to back up their interview scores objectively and the interview panel should be impartial and free from bias.
You should also consider whether your selection for redundancy is discriminatory. For example, if you have been absent from work due to maternity related sickness or due to a disability, and are scored down for attendance as a result, then the dismissal may be unfair and in breach of discrimination legislation.
Were you consulted about the redundancy?
If you are in a redundancy dispute with your employer then they do have to consult you about the proposals. They should meet with you to discuss the rationale behind the decision to put you at risk of redundancy and allow you to put forward alternatives. They should also consult with you in relation to what other roles might be available to you in the business.
In terms of individual consultation, procedurally, there needs to be at least one meeting with the employer and they should give you written notice of the meeting in advance. At the meeting they will have to say to you we are going to discuss your redundancy. That will be a serious meeting where you can have a long chat. You can raise any and all issues that you have.
If you have some potential claims to bring against the employer, this meeting may be a good time to mention, ‘without prejudice’, that you would like to enter into a settlement agreement. You should try to negotiate an amount of money that you would be prepared to accept. A professional employment lawyer, such as one of our team, is the perfect person to advise you during every step of this process. If you want to increase your final redundancy package, it is important that you are informed of the highest realistic settlement amount to aim for, and the best strategy to achieve it.
Did your employer consider alternative work for you?
In a redundancy situation, your employer should consider alternative roles for you within the business or any group company. This should include sending you lists of all available vacancies.
However, you could argue that your employer should be more pro-active than this, for example, by offering you a ring-fenced interview for roles that are a good skills match for you or providing you with help with writing your CV. Often this will depend on the size and resources of the employer. It is important to note though that your employer does not have to create a role in the organisation for you where none exists.
One word of advice – you will be in a better position to argue your redundancy was unfair if you apply for lots of roles but are not successful than if you do not apply for anything at all. It is also worth remembering that if you are offered an alternative role you are legally entitled to a four-week trial period, and if it doesn’t work out in that time you can still claim your redundancy pay.
Don’t forget to appeal
If you are made redundant then you should make sure that you appeal against the decision, pointing out any defects with the procedure as set out above. This can be useful evidence if you do end up challenging the decision in an employment tribunal.
How much is your redundancy dispute worth?
How much your redundancy dispute is worth will depend on things like your length or service, pay, whether there is any discrimination, length of time it is likely to take you to get another job and whether your employer got the procedure wrong.
You should also check your contract of employment or redundancy policy to find out whether contractually you are entitled to an enhanced redundancy package.
Why not also try our settlement calculator to work out how much you might be owed? If you want to find out more about negotiating a higher redundancy payment you can read our article here. You will also find information regarding statutory redundancy payments and whether you can be made redundant on the basis of test results only.
We are passionate about arming all employees with the information and advice that they need to make sure that they are treated fairly by their employer, but nothing can replace having an experienced employment lawyer fighting your case for you. We will deal with your case swiftly and professionally, and make sure you end up with the best possible outcome, both financially and professionally.