Redundancy

Redundancy

If you believe that redundancy was not the real reason for your dismissal and that your employer was hiding the true reason for dismissing you, you may be able to bring a claim for unfair dismissal.

Generally an Employment Tribunal will not interfere with an employer’s business decisions, and the employer will not be required to justify making redundancies. However, the Employment Tribunal must be satisfied that redundancy is the genuine reason for a dismissal and that a fair redundancy process has been followed.

You may be able to bring a claim for redundancy related unfair dismissal in the event that:

  • Your employer cannot establish that Redundancy is the real reason for your dismissal; and/or
  • Your employer failed to act reasonably in all the circumstances in treating redundancy as the reason for dismissing you, which importantly includes carrying out a fair redundancy process

The Law

The statutory definition of redundancy under S139 of the Employment Rights Act 1996 is:

“For the purposes of this Act an employee who is dismissed shall be taken to be dismissed by reason of redundancy if the dismissal is wholly or mainly attributable to—

(a) the fact that his employer has ceased or intends to cease—
(i) to carry on the business for the purposes of which the employee was employed by him, or
(ii) to carry on that business in the place where the employee was so employed, or
(b )the fact that the requirements of that business—
(i) for employees to carry out work of a particular kind, or
(ii) for employees to carry out work of a particular kind in the place where the employee was employed by the employer, have ceased or diminished or are expected to cease or diminish.”

If your employer cannot establish that on of the situations set out in the law above applies, then you may be able to bring a claim for unfair dismissal.

To establish if the your employer acted reasonably when making you redundant, including following a fair procedure, they should have complied with the following guidelines:

  • To warn and consult you about the proposed redundancy; and
  • To adopt a fair basis on which to select you for redundancy. Your employer must have identified an appropriate pool from which to select potentially redundant employees from and must have selected using a proper criteria
  • To consider suitable alternative employment for you. Your employer should have searched for and, if it is available, offer suitable alternative employment within its organisation.

If your employer failed to follow the guidelines set out above then you may be able to bring a claim for redundancy related unfair dismissal.

Who can bring a claim for redundancy related unfair dismissal?

In order to bring a claim for unfair dismissal, usually, you must be an employee and have the requisite qualifying service.

If you employment started before 6 April 2012, then you must have at least one year’s service to bring a claim for unfair dismissal. However, if your employment started after 6 April 2012 , will need two years’ qualifying service before you are entitled to bring a claim.

The ERA 1996 (Section 230 (1)) defines an employee as “an individual who has entered into or works under (or, where the employment has ceased, worked under) a contract of employment“. A contract of employment is defined as a “contract of service or apprenticeship, whether express or implied, and (if it is express) whether oral or in writing“.

If you are dismissed or selected for redundancy for reasons connected to pregnancy or childbirth, whistleblowing or asserting a statutory right then it will is deemed automatically unfair (and the qualifying period for bringing a claim does not apply),

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When do you need to bring a claim for redundancy related unfair dismissal?

To claim for unfair dismissal you must submit your claim to the employment tribunal within three months of your dismissal. Therefore it is imperative to take stock of your legal position and to obtain legal advice on an urgent basis.

The three month time limit can only be extended where the employment tribunal is satisfied that it was “not reasonably practicable for the complaint to be presented before the end of that period of three months”. However, the claim must still have been presented “within such further period as the tribunal considers reasonable” in order for an extension to be granted.

How much can you claim for?

If you are dismissed for redundancy you may be entitled to a redundancy payment, either under the statutory scheme or under your contract of employment.

However, if the dismissal if unfair, then you may be able to bring a compensation claim for unfair dismissal(See Unfair Dismissal for additional details on levels of compensation).