When redundancies are announced, it can be a challenging and unsettling experience. If you find yourself facing redundancy, it is crucial to speak to a legal professional, who can help you understand your rights and assess your options.

Here’s a guide to help you navigate the legal aspects of redundancy.

Understanding redundancy

Redundancy occurs when an employer needs to reduce their workforce. This could be due to various reasons such as the closure of a site, downturn in work or closure of the business.

Your rights during redundancy

  1. Consultation
    Employers must consult with employees before making them redundant. This involves discussing the reason and any alternatives to redundancy and holding redundancy consultation meetings;

  2. Notice Period
    Employees are entitled to a notice period before their employment ends which they may be asked to work or be paid in lieu for. An individual’s notice period will be outlined in their employment contract; however, it must meet the statutory minimum, which is one week’s notice for every full year of service up to a maximum of 12 weeks for 12 full years’ service or more;

  3. Redundancy Pay
    Employees are entitled to statutory redundancy pay if they have two or more years of continuous service with an employer. This is calculated according to age, length of service and weekly pay subject to a statutory cap. Some employers offer enhanced redundancy payments more than the statutory amount. You might find information about any enhancement in your contract of employment and/or a redundancy policy in your employer’s staff handbook.

Steps to Take When Facing Redundancy

  1. Request written details
    This helps an employee understand the situation and what questions to ask as part of the consultation process. It is important to obtain the minutes of any consultation meetings and check their accuracy once received;

  2. Review your contract of employment
    This should include clauses setting out your notice period and any contractual enhanced redundancy pay, if applicable;

  3. Seek alternatives
    During your consultation, employers must consider suitable alternatives to your employment, such as part-time work, or another internal role;

  4. Check for unfair dismissal and discrimination
    You may have grounds to challenge the redundancy if you believe you were selected unfairly or for discriminatory reasons. You should raise any concerns during consultation meetings;

  5. Appeal the Decision
    Your company will have an internal appeal process which you can use to challenge the redundancy decision if you believe it was unfair. Keep records of all communications and seek legal advice. There is usually a short deadline to appeal in writing which is set by your employer and is normally included in any dismissal letter.

Settlement Agreements

A settlement agreement is a legally binding contract between you and your employer, which typically includes compensation beyond statutory redundancy pay. This is a mutually beneficial agreement in which an employee will waive their right to bring future claims against the employer.

Key Points to Consider:

  • Enhanced compensation
    Settlement agreements allow you to negotiate a better financial package, which can reduce stress and provide financial stability when you are between employment;

  • Confidentiality clauses
    These prevent you from discussing the terms of the settlement agreement or the circumstances of your redundancy with others;

  • Legal advice requirement
    By law in England and Wales, you must have received independent legal advice before signing a settlement agreement. This ensures you fully understand the terms and implications, and your legal advisor must sign a certificate confirming this advice;

  • Mutual agreement
    Both the employer and employee must mutually agree to the terms set out in the settlement agreement.

  • Waiving of claims
    By signing the agreement, you waive your right to pursue any future claims related to your employment or redundancy. It’s essential to carefully review the terms to ensure they are fair and in your best interest.

Settlement agreements can provide an employee with a more secure exit from employment than compulsory redundancy. However, as stated in the points above, it is essential to seek independent legal advice, which will ensure that the terms of the settlement agreement are fair.

Speak to an employment law specialist

If you suspect the decision to make your role redundant was unfair or discriminatory, speak to one of our employment law solicitors for advice. We can provide guidance on your rights and help you navigate the complexities of employment tribunals if necessary. To speak to one of our experts, call 0845 287 0939 or complete our online enquiry form.