It is a well known fact that “Redundancy” ranks as one of the most stressful life experiences for many people. It is something we all dread and in most circumstances, an employee’s worst nightmare. The reality is that many of us are made redundant each year and with the current economic climate, the number of redundancies are still on the increase. In fact, the Chartered Institute of Personnel and Development forecast that more than a million people will have lost their jobs during the course of the recession.

It is essential for employees to know their basic rights when it comes to redundancy, and to ensure their employers act in a lawful manner by following the correct statutory redundancy procedure. Without being too technical and boring you with sections of the Employment Rights Act 1996 (the “Act”), in a nutshell the employer needs to show that there was a genuine reason for redundancy and that the dismissal was handled fairly. In summary, the Act contains three reasons for redundancy:

1. The closure of the business as a whole;
2. The closure of the workplace (e.g. one of the offices or factories); and
3. Less need for employees.

Steps your employer must take

1. Planning: Your employer must identify the necessity of making redundancies and make preliminary plans of when, where and how these should be made.
2. Duty to consult appropriate representatives: If your employers are making 20 or more employees redundant, they have a duty to consult with your trade union and the DTI.
3. Selecting the group/unit: Your employer must decide on the area where employees will be made redundant, the number of employees to be made redundant, invite volunteers and consider alternatives within the organisation.
4. Selecting the individuals: Once your employers have identified this area, they must then select which employees should be made redundant. Commonly, a ‘last in, first out’ policy is used.
5. Individual consultation: At this stage your employer should not dismiss, but should explain to the employee that there is a redundancy situation and that the employee’s job is at risk.
6. Sending out dismissal notices: Your employer should not send out these notices until the consultation has taken place.
7. Appeal system: Your employer should have a system in place for you to appeal against selection.

Remedies

If the correct procedure isn’t followed or you think the decision to dismiss you for redundancy was unfair, you could bring one or more claims on the following bases:

1. Wrongful dismissal. You could claim this for breach of contractual notice provisions.
2. Unfair dismissal. You could seek reinstatement, re-engagement or compensation (including a statutory redundancy payment), although you usually need to have been employed for at least a year in order to claim.

Pre-conditions for a redundancy payment

Even if the correct procedure has been followed by your employer and you were dismissed fairly, you may be entitled to a redundancy payment if you:

1. were an employee;
2. were continuously employed for a period of two years;
3. were dismissed by reason of redundancy;
4. were to bring the claim within 6 months;
5. do not fall within certain excluded categories; and
6. have not unreasonably refused alternative employment.

It is very important for us all to be aware of these pre-conditions. If you do not fulfil the criteria, you will not be entitled to claim redundancy and there is no point in attempting to sue your employer (even on a no win, no fee!).

As the end of 2009 approaches, James Stephenson looks at some of the upcoming legislative changes due to take effect in 2010 that directly affect employers and businesses.

Right to request time off for training is introduced

From April 2010 a right to request time off to undertake training is to be introduced.  This is modelled on the right to request flexible working.  Employers will be obliged to consider seriously any requests they receive but will be able to refuse a request where there is a good reason for doing so.  Employers will not be obliged to meet the salary or training costs for any time off.  The Government intends to introduce the right to time off to train employees with more than 250 employees from April 2010 with the legislation being extended to cover all employees from April 2011 at the earliest.

Sick Note Changes

From April 2010 the current "sick note" approach will be replaced with a "fit note" system. The format of the medical statement will be changed to allow doctors to record whether a patient is fit or not fit for work but also include a new option to allow a doctor to indicate where someone “may be fit for some work now”

Single Equality Act to be introduced

A significant piece of legislation to be introduced this year is the single Equality Bill, which is due to take effect from October 2010.  This consolidates existing equality law into a single piece of legislation.  More updates on this to follow.

Paternity leave and pay to be extended

Fathers will be able to benefit from up to 26 weeks' additional paternity leave under legislation scheduled to take effect from April 2011.  This benefit will only apply if the mother of the child returns to work before the end of the maternity leave period to which she is entitled. This will be available during the second six months of the child's life and may be paid if taken during the mother's statutory maternity pay period. The Government intends that the legislation is to come into force in April 2010, with effect for parents of babies due from 3 April 2011. 

We provide dedicated employment law advice to large or small businesses across England & Wales. Contact our Head of Department James Stephenson for more information about our services on 0113 320 5000