Redundancy can take several forms but is almost always used to keep a company afloat while it goes through a period of structural change, technological advancement or where forces are making the company less profitable. Sometimes, it can even be if a company is closing. Whatever the reason, handling redundancy proceedings badly and without following correct legal advice can cause several problems for your business.
To avoid being taken to an employment tribunal, your redundancy process needs to be compliant and followed correctly. There are several steps through the redundancy process that should be considered. Below we have outlined some of the key issues to think about. For full legal advice, please contact our Employment Law Department. QualitySolicitors Bradbury Roberts & Raby can help you restructure professionally and fairly.
You must give employees who are selected for redundancy a notice period before their employment ends. The statutory notice periods are:
- At least one week of notice if the employee has been employed between one month and two years
- One week of notice for each year of employment between two years and 12 years
- Maximum 12 weeks of notice for someone who has been employed for 12 or more years.
Even in small or micro businesses, employers are legally required to consult individually with each employee who is at risk of redundancy. Employers should always consult with employees before making any redundancies, explaining why the redundancies are necessary and if there are any alternatives to making employees redundant.
Consultation can either be individual or collective, individual consultation means the employer will speak to each person directly. The right to be collectively consulted applies when an employer proposes to make 20 or more employees redundant at one establishment over a period of 90 days or less.
Calculating Statutory Redundancy Payments
Along with notice pay, all employees with at least 2 years’ continuous employment must receive a statutory redundancy payment. The amount of this payment depends on the employee’s age, length of service and their weekly pay.
If there is no enhanced contractual entitlement, the redundancy payment is calculated as follows:
- Half a week’s pay for every full year of employment for employees under the age of 22
- One week’s pay for every full year of employment for employees who are 22 years of age or over and under 41 years of age
- One and a half week’s pay for every full year the employee was aged 41 and over.
This is subject to a limit of 20 years’ service considered and an upper limit on ‘weekly pay’ which currently stands at £508.00. A maximum cap of £15,240.00 for a single redundancy payment is another factor for employers to consider.
These issues outlined above are just some of the factors a business needs to consider when issuing redundancies. If you think redundancies are likely or you’re planning reorganisation, our expert legal team can advise you on what you need to think about.
Our advice is pragmatic and straightforward. We make certain we understand what you are hoping to achieve. We explain the likely outcomes, discuss options and make certain you know the relevant laws. Our advice is jargon free and we always disclose what our likely costs will be, which is why we have a great deal of experience helping businesses in this area.
Choosing QualitySolicitors Bradbury Roberts & Raby means you will have the peace of mind that expert legal advice is behind the important decisions you make.
Contact Partner and Head of the Employment Law Department, Ian Horner, or Paralegal, Marzia Kazmi, on 01724 854000 today for a Free Initial Assessment of your requirements.