1. Introduction to Redundancy
A redundancy arises where the business no longer requires work of a particular kind to be performed. Generally, this arises because the need for that kind of work has reduced (diminished). The definition of redundancy is where:
"An employee ... shall be taken to be dismissed by reason of redundancy if the dismissal is wholly or mainly attributed to ... the fact that the requirements of that business ... for an employee to carry out work of a particular kind ... has ceased or diminished or are expected to cease or diminish."
Employment Rights Act 1996 s. 139.
This can be when the employee's particular function disappears, reduces or situations arise where jobs are amalgamated.
What must be remembered is that a redundancy is a dismissal. Therefore, for it to be a fair dismissal (and avoid a claim for unfair dismissal) it must fall within the definition of redundancy (above) and a fair procedure must be followed in actioning the redundancy.
A redundancy procedure will have a number of stages including:
- The redundancy must be a genuine redundancy and fall within the definition above
- A fair selection criteria must be carried out to identify which employees may be redundant (and the selection must be from an appropriate 'pool')
- The Company must consult with employees about the situation
- The Company must consider alternatives to redundancy
- Employees who are made redundant must be made payments due under statutory redundancy and their contract of employment (and statutory notice provisions) or any enhanced redundancy policy.
An employee does not have the right to appeal against a redundancy (unlike within the disciplinary procedure where an appeal is an integral part in making sure the procedure is fair). However, it is generally considered to be best practice to include an appeal process.
In this section we look at each of the elements above as well as how to conduct redundancy consultation meetings.