Lawyers Leicester

EMPLOYERS GUIDE TO EMPLOYMENT LAW – LEICESTER

What is redundancy?

The classic legal definition of redundancy is that the job which an employee does no longer exists or the place where the employee undertook his or her work has closed. However, as with all things legal this does not fully explain the circumstances of redundancy, legal implications or what happens in situations which do not fir exactly with the general definition.

Business relocation

This is where an employer moves, or intends to move, the place of business from the place where the employee was employed. The test here is where the employee worked, not where they could be required to work under their contract of employment. Whether the move is sufficient to warrant a redundancy situation is based on the distance between the old and new premises, and the level of inconvenience to the employee. Consultation is important with the employee for obvious reasons.

Closure of business

This is where an employer has, or intends to cease to carry on the business for the purpose for which the employee was employed. It also applies if the part of the business where the employee works is closed, but the rest of the business continues.

Reduction in available work

This is where redundancy situations become more complicated. There may still be a job and place of work for employees, but not enough work for all the employees. Consequently, the employer will need to look at all options, consult with employees, and make decisions based on sensible and reasonable, transparent criteria. As long as the employer can demonstrate that there is a genuine need to reduce the number of workers and has applied the above principles, it is not open to an Employment tribunal, in dealing with a claim for unfair dismissal by way of redundancy, to “second guess” an employer’s actions and decisions.

When a redundancy situation arises, the following steps should be followed.

• Give employees sufficient advance warning of the impending redundancy situation in writing in the form of an ‘at risk’ letter. Ensure employees who are absent for whatever reason, including maternity and disability reasons, are also included.
• In situations where work has diminished, decide on the potential pool of employees from which those to be made redundant need to be chosen by reference to the type of work and skills involved. It would be inappropriate to include administrative staff in the pool if the employer only needs to reduce shop floor workers.
• consult with employees at all stages
• Decide on the criteria to select the redundant staff, options include length of service but there are many other possibilities, they do need to be documented and justifiable though
• Allow employees time to consider proposals and respond and be prepared to take on board employees suggestions
• The employer must make genuine efforts to ascertain whether suitable alternative employment exists within the employing entity of any associated company. Suitable alternative employment, if available, should be offered during the course of the consultation process.
• Before any dismissal it is important send a written statement to the employee setting out the reasons for selection for redundancy. The employee must be invited to attend a meeting with the employer, where they are entitled to be accompanied by a chosen representative. This is usually a work colleague or trade union representative.
• After the meeting you must inform the employee of your decision and notify them of their right to appeal the decision.