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Redundancy Discrimination

Redundancy often refer to a situation where an employer finds it necessary to reorganise its staff because certain jobs or job functions are no longer required. This can be due to various reasons such as:

  • The closure of a business
  • the reduction of the size of the workforce when specific roles are no longer required
  • relocation of all or part of a business
  • the introduction of a new technology which renders certain staff functions obsolete; or economic downturns.

In the UK, the Employment Rights Act 1996 provides a key legal framework that protects employees facing redundancy through the right to claim unfair dismissal. This right helps ensure fairness in the redundancy process.

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In order for a redundancy to be deemed to be fair, it needs to fall within the band of reasonable responses. This means there must be a genuine need to reduce staff numbers, together with a process that complies with the minimum legal requirements of UK employment law.

Fair redundancy procedures necessitate a consultation process which requires the employer to consider any means by which the redundancy can be avoided. The employer needs to consult directly with the individual at risk of redundancy. In collective redundancy situations where more than 20 employees are affected, the employer must consult with employee representatives of individual employees.

Consultation must be genuine with a view to avoiding redundancies or reducing the number of redundancies wherever possible. To avoid confirming redundancies at the end of the consultation process, the employer should consider offering alternative roles within the company. Employees should then be given the opportunity to apply for any suitable vacancies.

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If 20 or more employees are being made redundant within a period of 90 days at a single location, the employer must engage in collective consultation with employee representatives or trade unions. This collective consultation must last for at least 30 days. If 100 or more employees are being made redundant, this consultation period extends to 45 days. For fewer than 20 redundancies, there is no minimum period required for consultation, but employers must still engage in comprehensive consultations with individuals directly.

Employers need to adopt a fair and objective process for selecting employees for redundancy. This process should include factors like length of service, skills, performance, qualifications and disciplinary record. It is important that employers avoid criteria which can be discriminatory for example absence is related to a disability so that they do not unfairly disadvantage certain groups of employees.

Employees who have been continuously employed for at least two consecutive years are entitled to a statutory redundancy payment.

The calculation of the statutory redundancy payment is based on the employee’s age, length of service, and weekly salary, with caps applied:

  1. Half a week’s salary for each full year of service for employees under the age of 22
  2. 1 week’s salary for each full year’s service for employees between the ages of 22 and 40; and
  3. 1 1/2 week’s salary for each full year of service for employees over the age of 41.

The maximum length of service taken into account is 20 years and salary is capped at a certain amount which is regularly reviewed by the government. In addition to statutory redundancy pay, employees who are made redundant are also entitled to receive their contractual notice from their employer or to be paid in lieu of their contractual notice. Finally, they will also be entitled to a sum which is equal to their accrued but untaken annual leave at the time of the termination of their employment.
If you are being subjected to a redundancy process, you should seek legal advice to ascertain if an unfair dismissal claim has arisen. If your redundancy is either substantively or procedurally unfair, you could potentially make a claim in the employment tribunal for up to a year’s salary.

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