In broad terms, a redundancy arises where an employer decides to reduce a number of its employees, either within the business as a whole, or within a particular site, business unit or job role. Typically, redundancies arise from recession, changes in the nature of products or services, reorganisation, technological developments and relocation of business.
Redundancies arise in one of three circumstances, namely:
- the closure of the business altogether;
- the closure of one of several sites or relocation to a new site;
- diminished requirements of the business for employees to do work of a particular kind (often arising from a reorganisation).
Employees who are dismissed for redundancy may be entitled to a redundancy payment and, in appropriate cases, can claim that they have been unfairly dismissed.
Redundancy is a potentially fair reason for dismissal and can give an employer a defence to an unfair dismissal claim provided they acted reasonably in treating it as a sufficient reason for dismissal.
To avoid claims for unfair dismissal, employers must follow a fair procedure involving adopting a fair selection process and carrying out consultation.
We advise employers upon how to carry out fair redundancy selection and consultation processes. We can provide advice upon considering selection pools, adopting and applying fair selection criteria, how to conduct consultation meetings and the obligation to take reasonable steps to offer suitable alternative employment to employees selected for redundancy.
We advise employees upon whether employers have met their legal obligations and the merits and value of any claims for redundancy payments and unfair dismissal claims.