Redundancy is a difficult topic for many businesses, especially if it involves letting a long-term employee go.
But it’s still important to follow the right process in a redundancy situation. If you don’t, you can end up facing an employment tribunal claim.
Namely, this can be for unfair dismissal by redundancy.
Read this guide, which explains how and why a redundancy can become unfair. We can help ensure your redundancy procedure doesn’t end in unfair dismissal.
What is unfair redundancy?
Unfair dismissal occurs when an employer has not followed a fair redundancy process.
You should always speak to employees directly about why you have selected them and look at any alternatives to redundancy.
The redundancy procedure may be considered unfair.
The length of service required for an employee to make a claim is two years of continuous employment.
Unfair reasons for redundancy
In addition to following a fair procedure, you mustn’t have an unfair reason for selecting employees for redundancy.
This includes anything relating to protected characteristics, as this would be discrimination.
Some things are 'automatically unfair' if they’re the primary reason for dismissing an employee.
- Being pregnant or on maternity leave.
- Wanting to take parental leave.
- Being a trade union member or representative.
- Asking for a legal right.
- Doing jury service.
- Being involved in whistleblowing.
- Taking action, or proposing to take action, over a health and safety issue.
Having these reasons would be an unfair selection for redundancy, which employees again can claim in a redundancy tribunal.
They will not need length of service to bring a claim for automatic unfair dismissal – such a claim can be brought from day one
What is a fair redundancy process?
To ensure you are not using unfair redundancy selection criteria, the below is what you should focus on:
- Standards of work.
- Attendance and disciplinary records.
- Any redundancy criteria agreed with your union if you have one.
- Skills and experience (this can sometimes lead to people having to re-apply for their job).
If you use reasons outside of those, you’ll may have an unfair redundancy selection process.
To avoid an unfair redundancy process, it is advisable to:
- Give adequate warning of what’s happening.
- Consult about why they’re being selected if more than 19 members of staff are made redundant, however it is advisable to have them even if this is not the case
- Consider alternatives to redundancy, including alternative employment where available.
Examples of unfair redundancy
As you can see above, there are several laws protecting employees from unfair redundancy.
Let’s look at some examples to help understand the laws further.
Prejudging the outcome
This is when an employer gets rid of a particular employee, and then tries to retrospectively justify the decision by calling it ‘redundancy’
As an example, an employee received news of their redundancy—the business no longer had any requirements for the role.
Following their departure, the ex-employee soon happened upon a job advert from the former employer.
It was advertising a job role that was like the one they had left. This ex-employee later brought an unfair dismissal claim to the tribunal and won.
This was because their dismissal was not the result of redundancy—the company had sought to get rid of an employee, not the role.
Unfair redundancy pool
It is ordinarily a requirement for an employer to select employees from a selection pool when making redundancies.
This selection pool should include all employees facing redundancy and is significant when assessing the fairness of a redundancy consultation procedure.
When there is a reduced requirement for employees to carry out work of a particular kind, the selection pool should make up those employees carrying out that kind of work.
Otherwise, it may be considered an unfair dismissal
Unfair redundancy criteria
You consult with affected staff on the proposed redundancy selection criteria before applying them. When outlining the criteria, if you have vague criteria, it may not stand up in a tribunal.
Such as an ability to adapt with no justification for their score. Some scores are at complete odds with the annual appraisals of the employees at risk.
Alternatively, some employers will rely on criteria such as sales figures, but will then choose a period that skews the results against the person they don’t want to keep.
Sometimes employers will make unfair comparisons. For example, comparing the sickness absence record of one person with three years' service against another with only 6 months' service (who inevitably will have had less sick leave.)
Suitable alternative vacancies
Some employers take the view that consultation is only about looking at alternative vacancies within the organisation.
This is not the case; consultation should normally include a discussion of why the redundancies have arisen, any alternatives to redundancy, and redundancy selection criteria as well.
Employers are not obliged to ring-fence vacancies for only those at risk but equally should not exclude employees from applying for relevant positions.
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