The laws surrounding redundancy are involved, but most employers can fairly select employees for redundancy if the process is carefully planned and executed. Special rules apply when an employer proposes to dismiss at least 20 employees, from the same “establishment”. In other cases a different process applies depending on whether an employer is likely to choose one person in a stand-alone role for redundancy or a selection is between two or more employees undertaking the same or broadly interchangeable roles, in which case a selection procedure has to be applied. This is quite tricky for employers as the practice used to make a selection must be objective and it is not always possible to make objective comparisons between employees.
Redundancy basically occurs when an employer needs fewer employees to undertake the work available, or when it has less need for employees to undertake work at a particular place of work. There is a set formula for calculating redundancy payments for those with two or more years’ employment. This is based on age, length of service and gross weekly pay, but is subject to various caps.
If an employer gets the redundancy wrong it is vulnerable to claims for unfair dismissal.
We regularly advise employers upon a redundancy process from start to finish, and advise employees upon the fairness or otherwise of a particular redundancy and, as appropriate, bring Tribunal claims on their behalf.