Being at work whilst rumours of redundancy are going around can be a negative experience. Naturally, everyone begins to worry about their livelihood and their future. Whilst it may be tempting to stick your head in the sand, being aware of the law around redundancy can help to prepare you for what may be coming – allowing you to “hope for the best and plan for the worst”.
Some of the ways you can prepare are explored in this article, but before doing so, it is helpful to know what the law actually views as redundancy.
What counts as redundancy?
Redundancy, as a legal term, refers to circumstances which are a lot more specific than suggested by how the word is commonly used. To be made redundant, you must have been dismissed from work and, either wholly or mainly, due to one of the following reasons:
- The purpose for which you were employed is no longer needed as your employer has ceased (or intends to cease) carrying on business in that respect.
- Your employer has ceased (or intends to cease) carrying on business in the location where you were employed.
- The work you carry out is no longer needed to meet business requirements. For example, if staff numbers are excessive in comparison to customer demand.
- The work you carry out is no longer needed at that location to meet business requirements.
What can I do to prepare for a possible redundancy?
Whilst you can’t prevent your employer from making you redundant, you can ensure that they do not infringe your rights in doing so. The first step is to know the rights you have:
- Check your contract. Your contract is the main source of your employment rights. Also other employee documentation, such as any staff or company handbook, may provide information on redundancy procedures.
- If you are a member of a union, consult with a representative to see if they can give you any advice or guidance.
- If you are an employee (in the legal sense of the word), you should bear in mind that, if made redundant, you may be entitled to a statutory redundancy payment and a notice period. You must have been employed for at least two years to qualify for this protection. For more information, please see our page on redundancy.
Your employer’s obligations
Acas guidance encourages employers to discuss any proposed redundancies with their employees. In addition, employers are under a legal obligation to consult with union or other employee representatives in the event that 20 or more employees from one establishment are to be made redundant within a space of 90 days.
Recently, more than 400 former employees of Phones 4U successfully claimed compensation due to their employer’s failure to comply with this obligation.
Your employer must also ensure they do not discriminate against anyone when selecting staff for redundancy, whether on the basis of: age, sex, gender reassignment, sexual orientation, marriage and civil partnership, pregnancy and maternity, race, disability, and religion or belief.
An alternative to redundancy – a new or renewed contract
Not all redundancies result in an employee being left without a job. In some situations, employees can be taken on under another contract or have their contract renewed under amended terms. This might even be with a different, but associated, employer.
If you receive an offer of a new or renewed contract from your employer, there are several key points to bear in mind:
- Your employer’s offer must be made before the end of your existing employment.
- If your new contract is the same in terms of how and where you are employed, it must take effect no more than 4 weeks after the end of your previous contract.
- If your new contract is different from your previous one in respect of how or where you are employed:
- It must constitute a suitable offer of employment; and
- You are entitled to a trial period of 4 weeks. This allows you to work under the terms of the new contract to determine if you are willing to accept it.
- You will no longer be entitled to redundancy pay if you accept the offer of a new or renewed contract.
- You may lose your entitlement to redundancy pay if you unreasonably refuse a suitable offer of new employment.
As you can probably appreciate, the law relating to new or renewed contracts and redundancy payments is complicated. If you are in any doubt over your position, it is recommended that you seek specialist legal advice.
Furthermore, claims for redundancy pay can only be brought within a very short period of time, often as little as six months from the end of your employment. With this in mind, it is important to obtain legal advice as soon as possible if you think you may have a claim for redundancy pay.
How Truth Legal can help
This article is intended as an overview so you know what to anticipate should redundancy rumours surface. If you do end up being made redundant, and feel that your rights may have been infringed, you should contact a solicitor specialising in Employment Law for in-depth advice about your circumstances.
Our head office is in Harrogate but Truth Legal also has virtual offices in Manchester and London. We are more than willing to sit down with you for a free, no-obligation consultation and to discuss any ways in which we can help you.
You can get in touch either by telephone on 01423 788 538 or by emailing us at [email protected].