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Is your redundancy dismissal fair or unfair?

Posted on 25th June 2013
Must read Briefing note

This briefing note summaries the key issues your employer should take into account when implementing one or more dismissals for redundancy.

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Julie Temple Julie
Temple
Partner Telephone: 01473 694407

Where the employer has used unreasonable selection criteria or unfairly applied fair selection criteria any dismissal is likely to be unfair

Unfair redundancy dismissals

Your dismissal for redundancy is likely to be unfair if:

  • redundancy was not the true reason for your dismissal or
  • your employer did not follow a fair redundancy procedure before giving you notice of dismissal or terminating your employment.
If you believe your dismissal for redundancy was for another reason, for example because you have been on maternity leave or raised a grievance, you should take urgent advice. Any such dismissal could be automatically unfair.

In practice, however, the reason for the dismissal being for redundancy is not disputed and most tribunal claims are about whether the employer’s procedure that has been followed was fair.

What is a fair redundancy procedure?

Your employer needs to follow these core steps for a fair redundancy procedure:

  • correctly identify the ‘at risk’ employees by using a fair ‘pool of selection’
  • use and apply appropriate objective selection criteria
  • consult in a meaningful way with all ‘at risk’ employees before any final decisions are made; and
  • consider and offer suitable alternative employment where vacancies exist.

Questions and answers

What makes a fair pool of selection?

Whilst it is for the employer to identify the pool of selection the decision should take into account the following factors:

  • was the choice of the pool of selection within the range of reasonable responses?
  • did the employer genuinely think about the choice?
  • often, the pool will be narrow consisting of employees doing the same or similar work only
  • however, the pool can reflect the employer’s future plans for its business. There is no legal reason why a pool should be limited to employees doing the same or similar work. Provided the employer can justify its choice a wide pool of selection can be used.

What is meant by objective selection criteria?

The tribunal will look at both the reasonableness of the choice of the pool of selection and the employer’s choice of selection criteria used to identify the ‘at risk’ employees.

Where the employer has used unreasonable selection criteria or unfairly applied fair selection criteria any dismissal is likely to be unfair.

The tribunal will consider the following key factors:

  • the selection criteria, so far as possible, must be objective and capable of independent verification. This means the employer must try and rely on measurable results, from HR records, rather than a manager’s subjective personal opinions
  • if the employer recognises a trade union, the employer should discuss the proposed selection criteria with it before using them
  • examples of fair selection criteria include:
  • performance and ability
  • attitude
  • attendance record
  • future training needs
  • disciplinary record
  • and possibly length of service (normally used as a tie breaker).
  • employers are allowed to apply weightings to the criteria to highlight the most important
  • employers must avoid any criterion that discriminates, for example by selecting at risk employees on the basis they work part-time or on fixed-term contracts.

What happens if 20 or more employees are being made redundant at the same time?

When 20 or more employees are being made redundant over a period of 90 days or less, your employer must collectively inform and consult with appropriate employee representatives and give formal notification to the Secretary of State on Form HR1.  If your employer doesn’t comply a claim can be made to an employment tribunal for an award of up to 90 days’ pay.

In addition, your employer must still consult individually and follow a fair redundancy procedure.

I am absent from work and have heard about possible redundancies – should my employer discuss this with me?

Yes. You may be off work because, for example, you are unwell or just had a baby. If your role is at risk of redundancy your employer must still consult with you.

Do I have a right to time off to look for new employment?

Yes. If you have been employed for at least two years you have the right to time off to look for work or arrange training. Most employers allow all employees to take time off.

Should my employer consider alternatives to redundancy?

Yes. Employers should consider alternatives to your redundancy. Alternatives include:

  • offering you any alternative employment, even if it may not be suitable
  • reduced hours or days per week;
  • a temporary or permanent cut in pay or benefits;
  • seeking volunteers.
Your employer is not obliged to implement the alternatives but it should at least consider them.

My employer tells me that if I don’t accept his offer of alternative employment I will lose my redundancy payment. Is this right?

Possibly. If you unreasonably reject an offer of suitable alternative employment before you are dismissed for reason of redundancy your employer can refuse to pay you a statutory redundancy payment.

Factors that are personal to you, for example job status, travelling time and amount of pay, can all be taken into account by you when deciding if the offer is a reasonable one.

Our employment law solicitors will be able to advise you about the suitability of your employer’s offer of any alternative employment made to you.

My employer has mentioned ‘bumping’. What is it?

Bumping occurs if your employer moves person A, who is potentially redundant, into a role carried out by person B and makes person B redundant - person A ‘bumps’ person B.  It is a potentially fair way for your employer to deal with a redundancy situation although not a popular one if you are person B.

Can my employer reject my application for voluntary redundancy?

Yes. Your employer does not have to accept applications for voluntary redundancy. It will normally want to retain certain employees to maintain a balanced mix of skills and experience post the reorganisation and redundancies.

Can I object to my employer’s decision to implement redundancies?

No, unless you believe redundancy was not the true reason for your dismissal.  For example, you may challenge your dismissal for redundancy if you think that your employer was avoiding a capability procedure, or you were pregnant or disabled.

Am I entitled to bring a claim for unfair dismissal?

If you believe your employer has unfairly dismissed you for redundancy you may have a valid claim for unfair dismissal and possibly unlawful discrimination.

To bring a claim for unfair dismissal you must be an employee who has been dismissed.  You also have to have been employed continuously for the relevant period of time. In some instances you do not need two years’ service, for example if you have been selected:

  • in connection with your pregnancy, maternity, adoption, paternity or parental leave
  • because you were  summoned for or been absent on jury service
  • for a reason related to health and safety
  • because you have made a protected disclosure (‘blown the whistle’).
For more details about unfair dimissal claims including qualifying periods of employment please see When will your dismissal be unfair?

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