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 so as to be able to judge 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 covers:
- Correct redundancy procedure explained
- Are the redundancy reasons valid and genuine?
- What are fair redundancy selection criteria?
- Are the selection criteria impartial and fairly implemented?
- Did your employer consult you about the redundancy?
- Have you been considered for other roles?
- Don’t forget to appeal
- How much is your redundancy dispute worth?
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.
Use the questions below as a guide to help you ascertain whether or not your redundancy was fair, and get in touch to see if we could help you increase your settlement agreement.
You might also like to have a look at our Redundancy letter builder which creates a legal letter from you to your employer. The letter says why you think their treatment of you was unfair and proposes a way forward – either reinstatement or an exit settlement – which you will have chosen when answering the letter builder questions.
Our guides on redundancy overall and sham redundancy will both help broaden your understanding of what’s fair in redundancy situations. Other related guides and resources are listed at the end of this article.
Top TipsChris Hogg
Consider if there is a genuine business reason for why 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
Are the redundancy reasons valid and genuine?
If your impending redundancy is to be considered fair, then the reasons for your redundancy have to be valid and genuine.
For example, redundancies often arise when a business is closing down or moving, or when the need for a specific type of work has significantly reduced, perhaps because of the introduction of new technology, or the need to cut costs.
It usually means that your job no longer exists – at least not in the form that you were originally hired for. Your employer may decide to merge what were previously two roles or share out the work you were doing among other existing staff.
But, if you are told that you’re going to be dismissed for ‘redundancy’, and the next thing you know is that your employer has taken on a new person to do the same job, then it would be reasonable to question whether or not the so-called redundancy reasons are genuine, or whether this is a ‘sham’ redundancy.
Employment tribunals will only be concerned with whether or not your redundancy circumstances were valid or genuine, and not with whether or not it was a good idea. Neither are they going to be interested in arguments about the financial or other impacts on the business that your redundancy may result in.
What are fair redundancy selection criteria?
In the redundancy process, employers sometimes get wrong the factors (usually referred to as criteria) for selecting who is going to be made redundant, especially if there is more than one employee who’s at risk of being made redundant.
If there is more than one employee at risk of redundancy, the employers have to draw up a list of ‘objective’ criteria – meaning criteria which are not biased – for deciding who’s going to be placed in the group of people at highest risk of being made redundant or placed in the ‘redundancy selection pool’.
Each individual in the redundancy selection pool is given a numeric score for each criterion. So for example, let’s assume that ‘attendance’ was one of the criteria. If you got a score of 1 that would be very poor and 10 would be excellent. The individuals with the lowest overall scores would be selected for the redundancy pool, and the scores further refined by the employers in reaching their final decision. (See more on this in the next section below.)
Everyone else who does the same job as you should be included in the selection pool. There is also an argument for people doing largely the same, or very similar jobs as you, being included in the pool. If they are not included, then we suggest that you propose that they should be.
Of course, the larger the redundancy selection pool, the greater your chance is of not being selected. Conversely, if you are the only one at risk, you won’t have the protection of a redundancy selection pool.
Sometimes, however, if there is a redundancy dispute, your employer may make another employee redundant so that you can take on their job (often called ‘bumping’). The drawback with this is that your employer may have problems justifying such a strategy, so if they consider it at all, they will probably only do so after giving very careful thought to the implications.
Are the selection criteria impartial and fairly implemented?
The selection criteria that your employer would use when determining who to put in the redundancy selection pool would typically include things such as attendance record, skills and experience, work performance standard, disciplinary record.
Criteria such as attendance and disciplinary records can easily be verified from checking HR records. However, more subjective criteria like skills and experience, or work performance standards, may be based on the personal opinion of whoever is doing the scoring.
If that’s the case, there need to be checks and balances for justifying the scoring, including resort to records of past performance appraisals, peer reviews and similar. Your redundancy may well be unfair if your employer can’t show that they have objectively determined their scores for you.
Employers sometimes interview for redundancy selection to help determine which employees at risk of redundancy should go. There is no reason why they shouldn’t interview, but if they do, the panel carrying out the interviewing must select using objective selection criteria.
The employer also needs to be able to show that the interview panel members were impartial and as free from bias as possible, otherwise you may well get unfairly selected for redundancy.
One other thing to consider is whether or not you have been discriminated against in the redundancy selection process. For example, if you have been off work because of pregnancy-related ill health or because of a disability, you may have been given a low score for attendance criteria. In those circumstances, then your selection for redundancy may well be unfair and also break discrimination laws.
Did your employer consult you about the redundancy?
Another aspect of the redundancy process that employers sometimes get wrong and which can result in unfair selection for redundancy, is the requirement to consult with those individuals who are at risk of redundancy.
If you are at risk of being made redundant, the redundancy consultation process includes your employers having to explain to you in writing what they are proposing to do. In particular, they should let you know why redundancies are happening, how many employees will be affected, what the redundancy process is going to be, and how redundancy payments will be worked out.
In terms of individual consultation, the employer should convene a ‘without prejudice’ meeting with you and write to let you know about it in advance. At the meeting they have to inform you that the purpose of the meeting is to talk about your redundancy.
Your employers should give you the opportunity to propose any alternatives to your redundancy and to raise any issues that you may have with the situation. They should also give you information about what other roles might be available in the organisation that you could take on, instead of being made redundant. (See more on this below.)
If you have some valid claims to make against your employer, then now would be as good a time as any to let it be known, on a ‘without prejudice’ basis, that you would like to start discussions about 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 a member of the Monaco Solicitors’ 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.
Have you been considered for other roles?
As mentioned earlier, you should be considered for other jobs within the organisation as an alternative to redundancy. This should include providing you with written information about all available vacancies.
However, it might be argued that your employer should be more pro-active than this. For example, they could offer you a ring-fenced interview for roles that are good skills matches for you, or provide you with help in writing your CV.
Frequently this will be dependant on what resources your employer has at their disposal. They are not obliged to devise a new role for you where none currently exists.
One word of advice: If you apply for several existing roles but don’t succeed, then you will be able to present a much stronger argument for unfair dismissal than if you hadn’t applied for any of the jobs at all.
Remember too that if you are offered another job, then you have a legal right to a 4-week trial period in that role. If the job turns out to be unsuitable for you by the end of the trial period, you are still entitled to your redundancy pay.
Don’t forget to appeal
If you are made redundant then it’s important for you to appeal in writing against the decision. This is when you would bring to your employers’ attention any shortcomings in the redundancy procedure as outlined above.
It helps with any further negotiating that you might want to do towards a settlement agreement and can also be valuable as evidence if you end up contesting the decision at an employment tribunal.
How much is your redundancy dispute worth?
How much your redundancy dispute is worth will depend on things like your length of 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 overview article on redundancy 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 committed to 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. So, if you wonder whether or not we can help you, do get in touch.