Redundancy – the law
Under the Employment Rights Act, Section
139 it says “For the purpose 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 purpose of which the employer
was employed by him.
(ii) to carry on that business in the place where the employer
was still employed.
b) The fact that
the requirements of that business:-
(i) for the employers to carry out work of a particular kind.
(ii) for employers to carry out work of a particular kind in
the place where the employee was employed by the employer have
ceased or diminished or expected to cease or diminish.
What does this
mean?
For you to be redundant, your boss must have
decided he no longer needs your job or that he will no longer
need your job shortly or has decided that he is going to close
the business entirely or he is going to close the business
in the place where you are employed entirely or the work that
you do has diminished or is expected to diminish shortly. I
hope this is a little bit clearer?
A simple definition is to remember is
the business closing? If the business is not closing, is the
need for you to work doing the job you do ceasing or getting
less?
In order for the dismissal on the grounds
of redundancy to amount to a fair dismissal:
- Firstly, the employer must show that
it is a genuine redundancy situation.
- Secondly, the employer must consult with
you and discuss it with you in a meaningful way. Simply calling
you into an office and telling you that you are redundant
the day that you are actually dismissed is not meaningful
consultation although it still may not amount to unfair dismissal
if it can be shown that consultation would have made no difference.
It is certainly frowned upon by Employment
Tribunals for there to be no genuine consultation.
The next question you should ask yourself
- Does more than one person do your job?
If more than one
person does your job, then there should be a pool
of selection for the redundancy. That means that all of the
people who are doing the same job at the same location are
in a pool for potential redundancy, not just you as an individual
if your job is not unique.
If your job is
unique, then there is no need for a selection process
because your job is ceasing or diminishing then the employer
does not need to select anyone from a pool of people doing
your job.
Fred’s Thimble Makers Limited employs fifteen
people making metal thimbles. Your job is to fix
the machines when they break as you are a Handyman.
There are no other Handymen and your employer decides
he is going to make do without a Handyman.He calls
you into the office, discusses with you why he thinks
he does not need a Handyman, asks for your view on
this and any suggestions you may have and you go
back to him and say there are no other vacancies
and you can understand why they do not need a Handyman.
He then gives you a few days to think about any objections
you might have. You meet again and then he decides
to dismiss you on the grounds of redundancy. In these
circumstances, it is probable, not certain but probable,
that the dismissal will be a fair dismissal on the
grounds of redundancy.
Let’s go through the same
scenario but this time there has been a downturn in
orders.
There are four Lathe Operators and
he only has sufficient work on the order books for
two. In these circumstances, work has diminished and
that creates a genuine potential redundancy situation.
Provided he does not decide on a whim who is going
to be selected for redundancy and uses a fair process
for that selection and provided he consults with those
affected before he makes the decision, then the decision
is more than likely to be a fair reason for dismissal. |
When selection
is necessary
In my second example with the thimble making
Company selection is necessary because only two Lathe Operators
are needed whereas previously there was four Lathe Operators.
The employer will then be required because it says so in his
Contract of Employment with you as an employee to use redundancy
selection process he has used previously. More common is for
an employer to use “last in, first out”. It has
been used as a reasonable mechanism for selection time and
time again by the Employment Tribunals. However, the employer
does not have to use that provided he has not agreed in the
past to do so. He can use selection criteria based on point
scoring against the criteria provided the criteria or the selection
can be established through records or appraisals or by fair
judgment to be accurate scoring, then the ones who score the
least, could also be selected fairly for redundancy.
If you have been selected for redundancy,
that does not end it. If the employer has alternative work
available i.e. vacancies, he does not have to create vacancies
but if there are then vacancies available, he should allow
you to apply for them or if you suitable for that post, offer
that post to you.
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