REDUNDANCY: AN OUTLINE OF LAW AND PRACTICE
Redundancy, like much of employment law, is an increasingly complex concept. Its legal definition often bears little relationship with the reality of the distress, mental and physical, caused to workers who have lost their jobs. It is not unknown for employers to dispense with unwanted workers on the pretext of a sham “redundancy”, accompanied by minimally acceptable financial compensation. Such false redundancies can be attacked through an application of selected decided cases from the mass of case law. Sham redundancies may involve no redundancy at all, or minimal compliance with statutory procedures as interpreted by case law. In a recent case, a female worker was dismissed for redundancy shortly before her completion of the two-year continuous employment requirement. There was no evidence of redundancy. She was unable to claim unfair dismissal but there were possible claims of breach of contract and/or discrimination. These are discussed in more detail below.
Redundancy law and procedure is highly complex. The statutory provisions are overlaid with a mass of case law. Most of the concepts of redundancy law have been litigated, with complex results. There may be a significant overlap with other areas of employment law, for example discrimination and unfair dismissal.
Areas of future research include the meaning of “workplace”, given the number of people working from home, and “affected” by redundancy – does this mean more than workers who are actually at risk of redundancy or who are made redundant?
· Definition of redundancy
Closure of business; closure of workplace; reduction of workforce.
· Redundancy payments
Suitable alternative employment; statutory trial period.
· Lay-off and short-time
· Guarantee pay
· Unfair redundancy dismissal
No genuine redundancy situation; failure to consult; unfair selection; failure to offer alternative employment; reorganisation and new jobs.
· Redundancy and discrimination
Pregnancy/maternity dismissals; race discrimination; indirectly discriminatory selection criteria; Last in first out; disability.
· Time off to look for work
· Collective consultation.
STATUTORY SOURCE MATERIAL
The following sections of the Employment Rights Act 1996 (ERA) are relevant to redundancy issues: sections 28-35 (guarantee pay); 52-54 (time off work); 105 (dismissal); 135-146 (redundancy); 147-154 (lay-off and short time); 162-165 (redundancy payments).
Section 139: Redundancy.
1. For the purposes 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 purposes of which the employee was employed by him, or
ii. to carry on that business in the place where the employee was so employed, or
b) the fact that the requirements of that business—
i. for employees to carry out work of a particular kind, or
ii. for employees to carry out work of a particular kind in the place where the employee was employed by the employer,
iii. have ceased or diminished or are expected to cease or diminish.
Section 164: Claims for redundancy payment.
1. An employee does not have any right to a redundancy payment unless, before the end of the period of six months beginning with the relevant date—
a) the payment has been agreed and paid,
b) the employee has made a claim for the payment by notice in writing given to the employer,
c) a question as to the employee’s right to, or the amount of, the payment has been referred to an employment tribunal, or
d) a complaint relating to his dismissal has been presented by the employee under section 111.
2. An employee is not deprived of his right to a redundancy payment by subsection (1) if, during the period of six months immediately following the period mentioned in that subsection, the employee—
a) makes a claim for the payment by notice in writing given to the employer,
b) refers to an employment tribunal a question as to his right to, or the amount of, the payment, or
c) presents a complaint relating to his dismissal under section 111,
and it appears to the tribunal to be just and equitable that the employee should receive a redundancy payment.
3. In determining under subsection (2) whether it is just and equitable that an employee should receive a redundancy payment an employment tribunal shall have regard to—
a) the reason shown by the employee for his failure to take any such step as is referred to in subsection (2) within the period mentioned in subsection (1), and
b) all the other relevant circumstances.
4. Subsections (1)(c) and (2) are subject to section 207A (extension because of mediation in certain European cross-border disputes).
5. Section 207B (extension of time limits to facilitate conciliation before institution of proceedings) applies for the purposes of subsections (1)(c) and (2).
Section 52: Right to time off to look for work or arrange training.
(1)An employee who is given notice of dismissal by reason of redundancy is entitled to be permitted by his employer to take reasonable time off during the employee’s working hours before the end of his notice in order to—
(a)look for new employment, or
(b)make arrangements for training for future employment.
(2)An employee is not entitled to take time off under this section unless, on whichever is the later of—
(a)the date on which the notice is due to expire, and
(b)the date on which it would expire were it the notice required to be given by section 86(1),
he will have been (or would have been) continuously employed for a period of two years or more.
(3)For the purposes of this section the working hours of an employee shall be taken to be any time when, in accordance with his contract of employment, the employee is required to be at work.