Redundancy is a legal term for a type of dismissal and its statutory definition encompasses three different situations; business closure, workplace closure and a reduction of the workforce. Therefore, this means that either the whole company is closing down, your place of work is closing down, or that your employer no longer needs you to carry out the role that you were hired for.
Employees who are dismissed as a result of redundancy may be entitled to a statutory redundancy payment and may also be able to challenge their termination of employment as an unfair dismissal. Even in cases where the redundancy itself is a fair reason for dismissal, Tribunals will look at how reasonable this decision was. For example, if the employer did not give appropriate warning to the employee and then consult with them, it is likely that their actions were unreasonable.
Although some employees may be entitled to statutory redundancy payment, all employees facing redundancy are entitled to notice pay (which may be set out in their contract, or will depend on their length of service) and outstanding holiday pay. Statutory redundancy payment is available to employees with at least two years’ continuous employment.
Our employment team can advise on all aspects of redundancy procedures, and can advise in relation to any unfair dismissal claim which may arise as a result.