Merton Solicitors

What is redundancy?

Redundancy occurs where an employer no longer requires the services of an employee in a particular line of work because that line of work or the place where the employee worked no longer exists.  Please bear in mind that this is a very broad definition and does not say anything regarding the legal consequences of redundancy.

What do you mean by business relocation?

Business relocation happens where an organisation move their place of business to another location.  The legal test is where the employee in fact worked, not where the employee might be required to work according to their contract.  Whether redundancy can be deemed legitimate or not based on relocation depends on the distance between the new and old locations and how inconvenienced the employee will be by having to travel to the new location.

How is closure of business legally defined?

Closure of business is legally defined as the total closure of a business as a whole or a particular part of a business in which the employee worked.

Can a reduction in available work be used to justify redundancy?

This is a complicated issue.  Where there is insufficient work, the employer should look at all the possible options, consult with employees and base their decision on sensible grounds.  There must be a genuine need to reduce the workforce.  Failure to show a genuine need will make redundancies cases of unfair dismissal, although the definition of genuine need is purposefully left open as employment tribunals do not feel they are best placed to determine what is in the best interests of a business.

What steps should employers follow when making redundancies?

Employers must give adequate notice of their intention to make redundancies by giving employees ‘at risk’ letters.  This includes employees who are absent.  A decision as to the particular pool of workers who at risk of being made redundant should be made with reference to the particular skills and type of work that is no longer needed.  To narrow this pool down further, there needs to be additional criteria, such as length of service, to show the decision is not arbitrary.

At all stages, you should consult with your employees.  Employees should be allowed to make suggestions and employers should offer suitable alternative work if it exists.

Prior to dismissals, employees should be give a letter which states why they have been selected for redundancy.  They must also be given the chance to have a meeting with their employer and a representative, which is often a trade union representative.  Following the meeting, employees must be notified of the employer’s final decision and made aware of their right to appeal the decision.

What disciplinary procedures have to be followed prior to dismissal?

Even if the reasons for the dismissal are legitimate, you may be liable for unfair dismissal if you fail to follow the correct fair procedures.  You should make reasonable efforts to investigate the employee’s situation, arrange a disciplinary hearing which gives the employee a chance to state their side of the story, the employee must be notified of the hearing in writing, the notice must state the reasons for the hearing and the employee must be given a chance to bring a colleague or trade union representative along to the hearing.  After the hearing, the employee should be given a chance to appeal the decision and given a written set of reasons for the dismissal if one is made.

Return to the employment rights page or visit the employment law blog.