There have been several changes to employment law and regulations in the last few years and a key area that has been focused on is the lack of freedom associated with making an individual redundant.
The employment status of an employee can be terminated at any time, but unless the redundancy is fair, an Employment Tribunal may find the employer guilty of unfair dismissal. As a result, the business must consider the main principles involved concerning the redundancy of employees including the legal procedures to be followed and statutory redundancy pay.
What is redundancy?
Under the Employment Rights Act 1996, redundancy arises when employees are dismissed because:
- the employer has ceased or intends to cease to carry on the business of which the employee was employed or
- the employer has ceased or intends to cease to carry on the business in the place where the employee was employed or
- the requirements of the business for employees to carry out work of a particular kind has ceased or diminished or are expected to cease or diminish or
- the requirements of the business for the employees to carry out work of a particular kind, in the place where they were so employed, has ceased or diminished.
In short, the business reason for redundancy does not relate to an individual but to a position(s) within the business itself.
Consultation is a legal requirement
Employers who put forward redundancy for 20 or more employees within one organisation have a duty to consult representatives of any recognised independent trade union, or if no trade union is recognised, other elected representatives of the affected employees.
Consultation should be a priority within a generous timescale and must begin:
- at least 30 days before the first dismissal takes effect if 20 to 99 employees are to be made redundant at one establishment over a period of 90 days or less.
- at least 45 days before the first dismissal takes effect if 100 or more employees are to be made redundant at one establishment over a period of 90 days or less.
It is best practice, regardless of size and number of employees to be dismissed, for employers to consult with employees or their elected representatives as early as possible to allow discussion as to whether the proposed redundancies are necessary at all.
The business should ensure that those facing the proposed redundancy are made aware of any agreed procedures and opportunities available for consultation and representation.
Even though redundancy is a form of dismissal and it is not a requirement to follow a disciplinary or dismissal procedure that satisfies the requirements of the ACAS Code of Practice, it is considered best practice to do so.
The importance of disclosing information
The selection criteria for redundancy must be objective, fair, and consistent. So, employees are not unfairly chosen, the conditions should be agreed upon with employee representatives and an appeals procedure should be established.
Employers have a statutory responsibility to disclose in writing to the appropriate representatives the following information so they can play a constructive part in the consultation process:
- the reasons for the proposals made by the business.
- the number and descriptions of employees it is proposed to dismiss via redundancy.
- the total number of employees of any such description employed within the business stated.
- In what manner the employees will be selected for redundancy.
- how the dismissals will be carried out and what the planned timescale is.
- the method of calculating the number of redundancy payments (other than statutory redundancy pay) to be made.
Employers should also consider if the employee could be offered suitable alternative employment elsewhere within the organisation or any partnering companies before the option of redundancy is considered.
Employees who have been continuously employed for more than two years or who are under a notice period of redundancy, qualify for a reasonable amount of paid time off to look for another job or to arrange training.
Redundancy Notice Periods
If selected for redundancy, the employer must give the employee a notice period before employment ends. The statutory redundancy notice periods are:
- at least one week’s notice if employed between one month and two years.
- one week’s notice for each year if employed between two and 12 years.
- 12 weeks’ notice if employed for 12 years or more.
However, you should also check your contract of employment because your employer could have set out longer notice periods.
How We Can Help
If you are an employer in Northern Ireland, we will be more than happy to provide you with assistance or any additional information required on redundancy procedures so please do contact us at H McPartland & Sons Solicitors.