Learn With Unite

A genuine redundancy occurs in three situations:

• Where a business closes down completely
• Where the place of work closes down
• Where the employer requires fewer employees to carry out work of a particular kind.

You will be found to have been unfairly dismissed if you were unfairly selected for redundancy:

• for asserting a statutory employment right
• on parental leave (see Working parents) or maternity-related grounds
• because you work part-time (Part-time work)
• because you are a fixed-term worker (Employment contracts)
• for exercising or seeking to exercise the right to be accompanied at a disciplinary (Discipline) or grievance hearing (Grievances)
• requesting flexible working arrangements
• for a reason relating to rights under the Working Time Regulations 1998
• for a reason relating to rights under the National Minimum Wage Act 1998
• for a reason relating to the Tax Credits Act 2002
• for Whistle-blowing
• for participation in trade union activities, for membership or non-membership of a trade union and in respect of trade union recognition or de-recognition
• for carrying out duties as an employee representative or candidate for election for purposes of consultation on redundancies or business transfers
• for taking part in an election of an employee representative for collective redundancy purposes
• for taking action on health and safety grounds as a designated or recognised health and safety representative, or as an employee in particular circumstances
• for taking part (or proposing to take part) in consultation on specified health and safety matters or taking part in elections for representatives of employee safety
• for taking lawfully organised industrial action lasting eight weeks or less (or more than eight weeks in certain circumstances)
• for refusing or proposing to refuse to do shop work or betting work on Sundays (England and Wales only)
• for performing or proposing to perform the duties of a occupational pension scheme trustee
• for performing or proposing to perform the duties of a workforce representative for the purposes of the Transnational Information and Consultation of Employees Regulations 1999

If you work in a workplace recognised for collective bargaining with Unite, consultations should begin with your elected representatives as early as possible. In all circumstances, your employer should consult with the workforce about the possibilities of redundancies as early as possible, depending on how many redundancies are proposed. In addition, employers should consult employees who are affected by any proposed redundancy individually. Consultation should involve your employer explaining how and why redundancies have arisen and looking at ways in which they can be avoided or minimised. Your employer should also consider any alternatives to redundancy, such as working reduced hours or taking a pay cut and whether there are any suitable alternative roles you could undertake instead. Throughout the consultation process, you should be given the opportunity to ask questions and make suggestions about how your redundancy might be avoided.

Your employer must follow a fair and reasonable process in selecting people for redundancy. This includes using a fair and objective way of selecting who is going to be made redundant and explaining to employees what this is. Fair and objective selection criteria may include skills, qualifications, experience and disciplinary records. An employee cannot be selected for redundancy for a discriminatory reason (i.e. age, sex, religion, gender, race, disability, pregnancy) or automatically unfair reason (i.e. for a health and safety reason or reporting your employer for a criminal offence). You should be given the opportunity to comment on your individual results in any scoring exercise.

The employer must give at least one week’s notice for each full year of continuous employment up to 12 weeks: for example if an employee has worked for 5 full years then they would be entitled to 5 weeks notice. However the contractual notice is more than the statutory then the employer should give the greater amount.

If you are offered a ‘suitable alternative role’ you will need to think carefully before deciding whether to accept or reject a role. If you unreasonably reject a role which your employer considers to be a suitable alternative, you may lose your right to a redundancy payment. You have the right to a four-week trial period in any potential alternative role before you make a decision.

Whether a job is suitable depends on:

• how similar the work is to your current job
• the terms of the job being offered
• your skills, abilities and circumstances in relation to the job
• the pay (including benefits), status, hours and location

Your redundancy could be an unfair dismissal if your employer has suitable alternative employment and they do not offer it to you.

Trial periods

As we said earlier you have the right to a 4 week trial period for any alternative employment you’re offered.

The 4 week period could be extended if you need training. Any extension must be agreed in writing before the trial period starts.

Tell your employer during the trial period if you decide the new job is not suitable. This will not affect your employment rights, including your right to statutory redundancy pay.

If you’ve been continuously employed for 2 years by the date your notice period ends, you’re allowed a reasonable amount of time off to:

• look for another job
• arrange training to help you find another job

How long you can take will depend on your circumstances.

No matter how much time you take off to look for another job, the most your employer has to pay you is 40% of one week’s pay.

You’ll normally be entitled to statutory redundancy pay if you’re an employee and you’ve been working for your current employer for 2 years or more.

You’ll get:

• half a week’s pay for each full year you were under 22
• one week’s pay for each full year you were 22 or older, but under 41
• one and half week’s pay for each full year you were 41 or older

Length of service is capped at 20 years.

Your weekly pay is the average you earned per week over the 12 weeks before the day you got your redundancy notice.

If you were paid less than usual because you were ‘on furlough’ because of coronavirus, your redundancy pay is based on what you would have earned normally.

If you were made redundant on or after 6 April 2020, your weekly pay is capped at £538 and the maximum statutory redundancy pay you can get is £16,140. If you were made redundant before 6 April 2020, these amounts will be lower.

Calculate your redundancy pay.

Redundancy pay (including any severance pay) under £30,000 is not taxable.

Your employer will deduct tax and National Insurance contributions from any wages or holiday pay they owe you.

Exceptions

You’re not entitled to statutory redundancy pay if:

• your employer offers to keep you on
• your employer offers you suitable alternative work which you refuse without good reason

Being dismissed for misconduct does not count as redundancy, so you would not get redundancy pay if this happened.

You’re not entitled to statutory redundancy pay if you fall into one or more of the following categories:

• former registered dock workers (covered by other arrangements) and share fishermen
• crown servants, members of the armed forces or police services
• apprentices who are not employees at the end of their training
• a domestic servant who is a member of the employer’s immediate family

Short-term and temporary lay-offs

You can claim statutory redundancy pay if you’re eligible and you’ve been temporarily laid off (without pay or less than half a week’s pay) for either:

• more than 4 weeks in a row
• more than 6 non-consecutive weeks in a 13 week period

Write to your employer telling them you intend to claim statutory redundancy pay. This must be done within 4 weeks of your last non-working day in the 4 or 6 week period.

If your employer does not reject your claim within 7 days of receiving it, write to your employer again giving them your notice.

If you are an employee with over two years’ service with your employer, you have significant employment protection. You may have a claim against your employer if there is not a genuine redundancy situation, if you have been unfairly selected for redundancy or if your employer has not followed a fair and reasonable process.

If you are unsure please speak to your Unite District Office and seek guidance.