Understanding the process and the employer's obligations prior to dismissal is the key to survival. Whenever an employer is contemplating redundancies, there is a legal obligation to consult the employees affected. If 20 or more are to be axed within a 90-day period, the employer is required to consult appropriate representatives of all affected employees. Individual consultation is required in all cases, irrespective of the number of redundancies.
If you are going through a consultation, what should you ask your employer to tell you? Here's a checklist of the key questions:
- the reason for the redundancies (if the redundancy situation has arisen as a result of a business transfer, the position is more complex and legal advice should be sought)
- whose jobs are at risk
- whether employees are being selected for redundancy on the basis of their skills, length of service, attendance record or other factors – then check that the employer has the correct information on you
- what steps have been taken to redeploy staff and what suitable alternative employment is available for those at risk of redundancy
- the financial package on offer
- the anticipated date of redundancy and whether or not you are required to work your notice period (it is the employer's choice whether the employee is required to work their notice period or whether they will be paid in lieu)
- finally, what period of time the employer will allow for you to give your views, and for other affected employees to give their views?
Obviously, the above checklist is only a starting point. Every redundancy is different and there will be additional points that require clarification.
If your employer is going about it the wrong way, seek legal advice. This might result in you keeping your job. If the employer gets it wrong, they could face an unfair dismissal claim that could cost them a lot more than the redundancy.
If you are selected for redundancy, you still have rights. Once you have been given notice, and not before, you are legally allowed time off work, with pay, to seek other work or participate in training sessions. Your employer may request that you take time off at the beginning or end of the working day to minimise disruption.
The payments due on redundancy vary greatly depending on the employer's policies on employment contracts. However, as a bare minimum, you are entitled to the following:
- Accrued salary and benefits to the date of termination of employment; these are taxed and subject to National Insurance contributions.
- Accrued holiday to date of termination unless there is a provision in the contract requiring you to take holiday during your notice period; any sum in respect of accrued holiday is taxable.
- Notice, at the employer's discretion. You will either be required to work your notice period or be compensated. Whether or not compensation is taxable depends on your contract.
- Statutory redundancy pay, if you have the relevant qualifying service. This is tax exempt.
It is worth checking your contract to see whether you are entitled to compensation over and above the statutory minimum. Frequently, employers offer extra payments, but often only if the employee is willing to sign away any legal claims they may have. In this situation, you must take independent legal advice.