Date 13 January 2009
Being told that you are “at risk of redundancy” is something that strikes fear into us all, especially in the current climate. Sometimes the threat of redundancy comes as a complete shock to an employee, but more often is suspected, due to a general slow down in their work and the ever-reliable rumour mill. However, this does not minimise the emotional impact it can have to be told that you are being made redundant.
Initial Reaction
Along with shock often comes significant upset. It can feel very personal, effectively to be told that you are not needed; not wanted anymore. An employee starts asking questions such as; “What has caused this?”, “why me?”, “could it have been avoided?”, “Is there no alternative?” and” What about that office worker down the hall who always seems to be chatting rather than doing their work?”
These are all valid questions, and if the employer has done things correctly, they should have been answered long before redundancy became a reality for the employee.
Practical Considerations
I aim, through this article, to arm you with the knowledge to enable you to challenge all aspects of a redundancy and to ensure that you are treated fairly, and come out in the best position possible, both regarding financial package and career development, as a result of a redundancy dismissal.
“What has caused this?”
Wherever there is a possibility of redundancies, employers must consult with all employees that may be affected in advance of any redundancies being made. This means meeting individually with each employee (generally at least twice) to discuss the reasons for the redundancy, whether there are any alternatives, such as reducing hours, restructuring etc.
Consultation must be genuine. If an employee suspects that the decision has already been made, then any consultation is meaningless and the subsequent dismissal potentially unfair.
“Why me?”
An employer must correctly identify the ‘pool’ of individuals to be considered for redundancy. It may be the case that there is only one employee in that pool (for example where there is only one person doing the job that is redundant). However, there are often many employees that should be put into the pool of selection for redundancy. If an employee feels that they have been selected unfairly (for example because of their age, sex, or for reasons of disability-related absence) then again any redundancy dismissal could be an unfair dismissal, leaving the employee with a potential claim in the Employment Tribunal.
“Could it have been avoided?”
Employers are under an obligation, as part of a fair redundancy process, to look at alternative employment within the organisation, as an alternative to making an employee redundant. Any ‘suitable alternative employment’ should be considered for all ‘at risk’ employees. The question of whether employment is a ‘suitable alternative’ is always open to debate. Employers are inclined to argue that it is suitable (as this releases them from their obligation to pay redundancy monies), while employees generally argue that it is not suitable, so that they are entitled to their redundancy package. Whatever is offered, employees are entitled to a four-week trial period of the role. During this time they can test out the role and come to a conclusion as to its suitability. If they do not consider it suitable, then they still have the right to argue for their redundancy payment.
Unfair Treatment
If you do feel that you have been unfairly selected, or that the redundancy is not genuine, then you should raise this in writing with your employer. If that is not dealt with to your satisfaction, then you may want to consider bringing a claim against them in the Employment Tribunal. If successful, you can claim your loss of earnings from the date of dismissal until the date you find a new job. You could also claim additional compensation if the redundancy is held to be in any way discriminatory.
Payment
Statutory redundancy payment is not a great deal to say the least, and in most cases is no more than £330 per full year an employee has been employed. The only time employees really benefit from a redundancy, is where they have a more generous contractual redundancy package, and were perhaps thinking of leaving the organisation anyway.
An employer may want the additional protection of a Compromise Agreement. This is a written agreement in which the employee signs away their right to bring any claims in the employment tribunal, in return for a payment (usually comprising their redundancy payment plus a compensation payment). In order for such an agreement to be binding, an employee must take independent legal advice. It is very useful to get such advice, because a specialist employment solicitor can advise on the fairness or not of the redundancy procedure. If a fair procedure has not been followed, then there is scope to negotiate a much higher settlement package, on the basis that the employee has a potential claim again their employer.
It is also possible to negotiate additional assistance, such as CV writing training, counselling by outplacement consultants and courses to improve skills, all of which will help you in the search for new employment.
5 Tips to Surviving Redundancy
- Get advice sooner rather than later, so that you know what you are entitled to, what you should ask and when.
- Think about the questions you want to ask, before going into the relevant meetings and write then down. This way you will not forget to raise all of the relevant issues, and keep full notes of all answers so that you have a full written record.
- Get Financial advice. This is important if you do receive a compensation payment from your employer.
- Build up your support network. Get in touch with all of those old contacts. That way you expand your network of support and potential job offers.
- Be proactive in finding out what you want to do. Look back at the most positive aspects in your life, listing which jobs you liked the most and why.
If you require any further information or assistance with any of the issues featured in this article, please contact a member of the employment team on 01727 798000.
© SA LAW 2009
Every care is taken in the preparation of our articles. However, no responsibility can be accepted to any person who acts on the basis of information contained in them. You are recommended to obtain specific advice in respect of individual cases.