Redundancy law

Redundancy law – The key developments

• An individual cannot bring a claim for failure to consult under collective redundancy laws (case 1).

• A failure to inform an employee of an alternative vacancy was a procedural error, but the dismissal was nevertheless fair as he would not have been given the job anyway (case 2).

• A redundancy policy stating that the union would be consulted was contractual, so a failure to follow it was a breach of contract (case 3).

• Individual consultation of one week prior to redundancy was reasonable in the circumstances (case 4).

The basic legal rules

A redundancy situation exists where the need for work ceases or diminishes for any reason. The employer must:

• adopt redundancy selection criteria that are not discriminatory;

• allow employees selected for redundancy the right to time off to look for other work, provided they have at least two years’ service;

• pay redundancy pay to employees with two years’ service – the statutory minimum is a week’s pay (up to £310 a week) for each year of service, with more for older workers and less for very young ones; and

• offer alternative (and suitable) employment where this is available.

If 20-plus redundancies are proposed, the employer must notify the Department for Business, Enterprise and Regulatory Reform. It must also consult employee reps, with a view to reducing the number of redundancies. Where an employer fails to consult, a union can apply for a protective award, up to a maximum of 90 days’ pay.