To ensure your business remains dynamic and moves with the times, you need to be familiar with all business moves at your disposal. Business restructurings are a common tool in a company’s arsenal and at times this can involve making redundancies. If you take the difficult decision to make employees redundant, you must ensure the redundancies are lawful. If they are not lawful, you may face costly employment tribunal claims from former employees that will divert time and resources away from your business aims. At Adam Bernard Solicitors, our London-based employment experts can assist you in the redundancy process ensuring you act within the law.
For a redundancy to be lawful, the employer must be able to demonstrate that the redundancy was for a valid reason and correct procedure is followed.
Redundancy should be a last resort for businesses. If you decide to make employees redundant you should show that you have taken steps to avoid compulsory redundancy such as asking for volunteers and filling vacancies in your business with existing employees.
A claim for constructive dismissal must be made within 3 months less one day from the date of your resignation. The ACAS process must be followed before any claim is submitted.
For example, If you were dismissed on the 2nd of January, you would need to lodge your claim with ACAS before 1st April. We can assist you in filing for ACAS Early conciliation and entering into negotiations with your employer.
You can offer alternative employment to people selected for redundancy. To be valid the offer must be unconditional and in writing. The offer must be made before their contract ends and start no later than a month after the end of their contract. The employee must not have to apply for the job, and the offer must show how the new job is different to their old job.
You must notify the redundancy payments service prior to the consultation. You must consult with employee representatives or trade unions and provide them with adequate information on the proposed redundancies. This includes providing further information if requested. Provide selected employees with notices showing termination dates and issue redundancy notices when you complete the consultation.
Employers are under a duty to consult with employees who may be selected for redundancy. If you plan to dismiss 20 or more employees from a single establishment within 90 days, you are under a duty to follow the collective consultation rules.
If you plan to dismiss between 20 and 99 employees, the consultation should last a minimum of 30 days. If you plan to dismiss 100 or more employees, the consultation should last a minimum of 45 days.
When you make employees redundant, you will have to pay them a statutory redundancy payment if they were an employee with at least 2 years’ service with the company and they have been dismissed. Employees that opted for early retirement are not entitled to a statutory redundancy payment.
Statutory redundancy pay is calculated by considering the employee’s age and years of service to the company. For more help see the Government’s statutory pay calculator here.
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