UK Redundancy Process
19 October 2020
In the UK, an employee’s employment can be terminated by way of redundancy at any time provided the redundancy is fair.
Under the Employment Rights Act 1996, redundancy arises when employees can only be fairly dismissed because the role has been impacted. For example the employer:
- has ceased or intends to cease either the place the employee worked or the business for which the employee was employed; or
- the work the employee performs has ceased or reduced significantly or is expected to do so.
Employers who wish to make redundant 20 or more employees from one place of business have a legal duty to consult with representatives of a relevant recognised independent trade union or other elected representatives of the affected employees, with a minimum consultation period of 30 days (or 45 days where more than 100 employees are affected).
An employee will be deemed to have been unfairly selected for redundancy for the following reasons:
An Employment Tribunal will find an employee to be unfairly dismissed if the redundancy is connected to those who:
- participate in trade union activities;
- carry out duties as an employee representative for purposes of consultation on redundancies;
- participate in an election of an employee representative;
- take action on health and safety grounds as a designated or recognised health and safety representative;
- assert their statutory employment right; or
- are discriminated against because of race, gender, maternity, sexual orientation or any other unreasonable ground.
Disclosure
Employers have a legal duty to disclose in writing to the appropriate representatives:
- the reasons for the proposed redundancies;
- the number and descriptions of roles being removed;
- the way in which employees will be selected for redundancy;
- how the dismissals will be carried out and over what timescale; and
- the method of calculating the amount of redundancy payments if something other than statutory redundancy pay.
Employees who have at least two years’ continuous service qualify for a redundancy payment.
What next?
Redundancy is an area of employment law which requires careful consideration and an in depth understanding of the process. If you are considering making an employee redundant, please contact us.
