Redundancy: the legal rights.Introduction This checklist looks at employees' legal rights when their job has been made redundant. It examines both statutory and contractual rights A contractual right is a claim, on other persons, that is acknowledged and perhaps reciprocated among the principals associated with that claim. Specialized contractual rights exist as part of a "contract" or agreement between persons to whom these rights belong. , and suggests other sources of help and information. It is addressed to employees, but the information is equally relevant to managers who need to make redundancies. Please note that, whilst every effort has been made to provide accurate and relevant information as at May 2005, this checklist is not intended as specific legal advice to cover any particular situation, and therefore the Chartered Management Institute Inspiring Leaders The Chartered Management Institute is a professional institution for managers, based in the United Kingdom. In addition to supporting its members, the organisation encourages management development, carries out research, produces a wide variety is not liable for any cost, loss or damage caused by relying on this information. It is advisable ad·vis·a·ble adj. Worthy of being recommended or suggested; prudent. ad·vis  a·bil to
seek professional advice on an individual basis before taking any
action.
National Occupational Standards for Management and Leadership This checklist has relevance to the following standards: B: Providing direction, unit 8 Definition A job is redundant when the need for that job to be done in a particular location has diminished or disappeared. This can arise in situations where a business or part of a business is being closed down or transferred to another site, or where fewer people are required to do the work. Employees' rights are governed by employment law (general employment rights; unfair dismissal unfair dismissal n → despido improcedente unfair dismissal n → licenciement abusif unfair dismissal unfair n → rights; specific redundancy rights, including entitlement to statutory redundancy pay; possibly TUPE TUPE Transfer of Undertakings (employee rights) TUPE Transfer of Undertakings Protection of Employment (UK) TUPE Tupelo National Battlefield (US National Park Service) rights regarding the transfer of an undertaking; possibly non-discrimination rights) and by their individual contracts and terms and conditions of employment conditions of employment that part of an employment that sets out the duties, responsibilities, hours of work, salary, leave and other privileges to be enjoyed by persons employed, for example a veterinary nurse, in private practice. . Action checklist 1. Know your statutory employment rights Statutory legal rights are largely dependent on length of service. All employees, regardless of length of service, have the right not to be dismissed for reasons relating to relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc sex, gender or marital status marital status, n the legal standing of a person in regard to his or her marriage state. ; pregnancy or childbirth childbirth: see birth. Childbirth Childlessness (See BARRENNESS.) Artemis (Rom. Diana) goddess of childbirth. [Gk. Myth. ; race, nationality or ethnic origin; trade union membership; disability; religion or religious belief; sexual orientation sexual orientation n. The direction of one's sexual interest toward members of the same, opposite, or both sexes, especially a direction seen to be dictated by physiologic rather than sociologic forces. ; health and safety reasons; seeking to enforce statutory employment rights. All employees with more than one year's service have the right not to be unfairly dismissed. A dismissal can be considered unfair if: * there is not a fair reason for the dismissal (redundancy is considered a potentially fair reason) * a fair procedure has not been followed--in the case of redundancy, a fair procedure should include consultation, and any suitable steps to avoid dismissal (such as a search for any other suitable employment with the employer) Employees with two or more years' service have the right to statutory redundancy pay, paid time off for job-hunting, and one week's statutory notice period per year of service, up to 12 weeks' maximum. If you feel your employment protection rights are being breached, you have the right to bring an Employment Tribunal Employment Tribunals are inferior courts in Great Britain which have statutory jurisdiction to hear many kinds of disputes between employers and employees. The most common disputes being concerned with unfair dismissal and discrimination. claim against your employer. The maximum compensation that you may receive is a basic award dependent on your salary, age and length of service (maximum 8,700 at February 2006) and a compensatory award for your potential loss of earnings (maximum 58,400 at February 2006). If you have been dismissed for discriminatory dis·crim·i·na·to·ry adj. 1. Marked by or showing prejudice; biased. 2. Making distinctions. dis·crim reasons, there is no limit to the total compensation which may be awarded. In all situations, you are expected to mitigate your loss as much as possible. If you feel that any terms of your Contract of Employment are being breached (if, for instance, you are not getting your full notice entitlement), you have the right to bring either a tribunal or a court claim against your employer. Maximum compensation which a tribunal may award is 30,000, and you are expected to mitigate any loss that you may suffer. 2. Consider whether TUPE applies You may be covered by TUPE (Transfer of Undertakings--Protection of Employment) Regulations if your company is being merged or taken over, or if the services your department provides are being contracted out. TUPE law is extremely complicated and each situation has to be considered on its own merits. However, indicators that TUPE might apply are that: * the new organisation will continue to provide your products or services * your company or department can be considered as a discrete, separate unit * there has been a transfer of assets The conveyance of something of value from one person, place, or situation to another. The law recognizes that persons are generally entitled to transfer their assets to whomever they wish and for whatever reason. The most common means of transfer are wills, trusts, and gifts. . If TUPE does apply, your current contractual terms A contractual term is "[a]ny provision forming part of a contract"[1] Each term gives rise to a contractual obligation, breach of which will can give rise to litigation. are taken over by your new employer. That means that your terms and conditions of employment (such as salary; benefits, except currently pension; hours; holidays; location) remain unchanged and that your service with the two employers is considered continuous. The new employers may also ask you to agree to some changes in your employment terms, in order to maintain consistency in their organisation. The new employers may make you redundant, if they need fewer people to do your work in your location. If so, all your redundancy rights will apply. Your current employer is obliged o·blige v. o·bliged, o·blig·ing, o·blig·es v.tr. 1. To constrain by physical, legal, social, or moral means. 2. to consult with affected employees and their elected representatives over the proposed transfer. This consultation should cover the reasons for the transfer, the implications for affected employees, and the 'measures' or actions which are planned. If your new employers are proposing to make 20 or more people redundant within a 90-day period at your location, they are also obliged to consult with you regarding the redundancies. 3. Know your redundancy rights Depending on the number of employees being made redundant, your employer may be required to consult with employee representatives. * under 20 redundancies--there is no requirement to consult with representatives, but your employer should still consult you individually for a reasonable period * 20-99 redundancies--there is a 30-day consultation period * 100+ redundancies--there is a 90-day consultation period The purpose of the consultation is to consider any possible ways of avoiding redundancies, and to ensure that employees are fully informed about the reasons for the redundancy, the redundancy procedure, the methods for selecting employees for redundancy, and the severance terms. No redundancy dismissal should actually take effect during the consultation period (unless this is agreed by the employee), although notice of redundancy may be served. If you have been selected for redundancy, you are entitled en·ti·tle tr.v. en·ti·tled, en·ti·tling, en·ti·tles 1. To give a name or title to. 2. To furnish with a right or claim to something: to know the selection criteria. These apply where some but not all of the same or similar jobs have to be made redundant. Fair criteria which may be used to select which individuals are redundant include: length of service; attendance records; disciplinary records; skills, competencies or qualifications; work experience; and performance records. Your employer is also obliged to see whether any suitable alternative positions exist for you within the organisation. These should be on the same terms and conditions as your current position. Such alternative positions are subject to a four-week trial period (on both sides) to confirm suitability. Once you have been given notice of redundancy, and provided you have two years' service, you are entitled to reasonable paid time off to seek other employment or further training. You are also entitled to appeal against the redundancy decision, to an independent manager within your organisation. 4. Communicate with your employer Try to get as much information as possible as quickly as possible from your employer. As a minimum, do get in writing: * the reasons for the redundancy * the criteria for selection for redundancy * the proposed redundancy date * the amount of statutory or other compensation you will receive. You should be given the opportunity to have at least one individual meeting with your employer (i.e. not in a collective meeting with other people). Take this opportunity to ask your employer if there are any alternatives to your redundancy or possibilities of continuing to work for your employer by, e.g., reducing your hours, job-sharing, replacing someone keen to take voluntary redundancy voluntary redundancy n (BRIT) → despido voluntario voluntary redundancy n (Brit) → départ m volontaire (en cas de licenciements) or taking on a different job (maybe part-time or through retraining re·train tr. & intr.v. re·trained, re·train·ing, re·trains To train or undergo training again. re·train ). Consider the questions below: * Is your selection fair? If you think not, how can you appeal? * Can your employer help you find another position, perhaps by contacting other companies in your area for you to see if they have any potential openings? * Will your employer agree to vary your compensation package to suit your personal needs by, for instance, trading some redundancy pay for enhanced pension terms, or giving you the opportunity to buy your company car at below market rates? * When must you go? Your employer may want you to work out your notice, or you may have been given the option of garden leave or pay in lieu of notice In the United Kingdom, if an employer dismisses an employee without giving the requisite notice pursuant to law or the employee's contract, the employer should pay in lieu of notice. ‘In lieu’ means ‘instead of’. This is also called severance pay. . Remember that pay in lieu of notice is normally taxable, just like salary. 5. Calculating Statutory Redundancy Payments redundancy payment n → indemnización f por desempleo redundancy payment n (Brit) → indemnité f de licenciement You have the right to statutory redundancy payment if you are aged 20 or over and have two years' continuous service. Statutory redundancy pay is based on your age, salary and length of service, as follows: * number of years service (ages 18 to 21): 0.5 week's pay per year * number of years service (ages 22 to 40): 1 week's pay per year * number of years service (ages 41 to 64): 1.5 weeks' pay per year. These amounts are reduced in the period prior to retirement (i.e., if you are aged 64). Up to 20 years' service counts. A 'week's pay' is currently limited to a maximum of 290 [pounds sterling]. The maximum payment is therefore 8,700 [pounds sterling]. Redundancy payments under 30,000 [pounds sterling] are normally not subject to income tax or National Insurance Contribution deductions. You lose your right to statutory redundancy pay if you unreasonably refuse suitable alternative employment offered by your employer. There is no legal obligation on your employer to offer more than statutory redundancy pay, unless this has been specifically agreed in individual contracts or collective agreements. However, some employers offer enhanced redundancy terms. How not to deal with legal rights on redundancy Don't: * neglect to seek professional advice if you remain concerned * take any action too quickly, without considering the full implications * behave in any way which might put your legal rights at risk, any misconduct at work for example. Additional resources Books Unfair dismissal legal essentials, 4th ed Hammonds London: Chartered Institute of Personnel and Development The Chartered Institute of Personnel and Development (CIPD) is the leading professional body for those involved in the field of personnel, training and development. Membership of the CIPD is highly respected and widely accepted by employers as a requirement of practice. , 2004 Law at work 2004 London: Labour Research Department, 2004 This is a selection of books available for loan to members from the Management Information Centre. More information at: www.managers.org.uk/mic Related checklist Working out your redundancy package (057) Internet resources Redundancy Help website www.redundancyhelp.co.uk Independent online advice resource CAB (Citizens Advice Bureau A Citizens Advice Bureau (CAB) is one of a network of independent charities throughout the UK that give free, confidential information and advice to help people sort out their money, legal, consumer and other problems. ) www.adviceguide.org.uk For online advice Find your local CAB at www.citizensadvice.org.uk Organisations Advisory Conciliation conciliation: see mediation. and Arbitration Service (ACAS ACAS Cardiology A clinical trial–Asymptomatic Carotid Atherosclerosis Study which evaluated the 5-yr risk of fatal and non-fatal stroke-primary outcome in Pts with asymptomatic but severe carotid atherosclerosis. See Carotid stenosis. ) Brandon House, 180 Borough High Street Borough High Street is the last section of the road from Dover to London as it approaches London Bridge. It is also the northern section of the A3 road from London to Portsmouth. It divides historic Southwark in two. , London, SE1 1LW Tel: 020 7210 3613, National Helpline helpline Noun a telephone line set aside for callers to contact an organization for help with a problem helpline n → teléfono de asistencia al público : 08457 474747 www.acas.org.uk Department of Trade and Industry The Department of Trade and Industry was a United Kingdom government department which was disbanded with the announcement of the creation of the Department for Business, Enterprise and Regulatory Reform on 28 June 2007[1]. , Enquiry Unit, 1 Victoria Street, London, SW1H 0ET. Tel: 020 7215 5000 www.dti.gov.uk Consider contacting: * your trade union * your solicitor |
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