What Is Redundancy?

A redundancy occurs when an employee is dismissed because their job no longer exists. This might occur because of necessary cost cutting, new technology or the business is closing in whole or in part. Redundancy, like any dismissal, can be most distressing and the law therefore takes account of the need for good communication between employer and employee.

The employee is entitled to be consulted regarding these proposals and in particular when an employer proposes to make 20 or more employees redundancy at one establishment over a period of no more than 90 days, the employees need to be collectively consulted.

It is obviously the case that redundancy should be regarded as a matter of last resort. Consultation must be started in good time and there must be fairness in selecting any particular individual for redundancy. These criteria must be consistently applied and be fair and objective.

An employee may be entitled to a redundancy payment after 2 years continuous employment and the calculation is based upon age, years of service and weekly pay. The maximum number of years service to be taken into account is 20 years. The maximum weekly pay is £430.

There is an entitlement to a notice period before redundancy.

In the event that you believe that the redundancy comprises an unfair reason for dismissal, you may make a claim to the Employment Tribunal on that basis.

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