Making an employee redundant

What is redundancy?

Redundancy is when you dismiss someone because:

• their workplace closes
• there is a diminishing need for a particular type of work

The job must disappear before you make an employee redundant - you cannot replace them.

Keeping employees informed

If you are going to make 20 or more employees redundant within 90 days, you must consult the employees' trade union or other elected representatives and consult with the employees as individuals. If you make fewer than 20 employees redundant, you must still consult the individual employees and it's good practice to consult their representatives.

Under statutory discipline and grievance procedures in force as of 1 October 2004, employers must set out the circumstances surrounding redundancy action, invite the employee to a meeting before any action is taken and advise them of their right to appeal. The standard dismissal and disciplinary procedure will apply when the employer is contemplating any dismissal, including redundancy. Failure to follow the procedure when it applies will make any dismissal automatically unfair.

For businesses with more than 150 employees, the Information and Consultation of Employees (ICE) Regulations apply. By April 2008 they will apply to all businesses with more than 50 employees. These regulations do not replace existing laws, but they give employees a statutory right to information about and consultation on employment developments, including redundancies. Read about the information and consultation regulations on the Department of Trade and Industry (DTI) website.

Lay-offs and short-time working

A lay-off happens when you can't give an employee paid work for a temporary period.

Short-time working, for redundancy purposes, is where the employee's pay is less than half a week's pay.

Employees who have been laid off or put on short time in accordance with the terms of their employment contracts may leave and claim redundancy. Provided they comply with certain time limits, employees can claim a redundancy payment if the lay-off or short-time working runs for:

• four consecutive weeks or longer
• a series of six or more weeks - of which not more than three were consecutive - within a period of 13 weeks

Guarantee pay

If you don't provide the employee with work throughout a complete day during which they would normally be required to work, they are entitled to a statutory guarantee payment. The maximum payment is five days in any three months.

Different laws govern Northern Ireland. For information call the Northern Ireland Redundancy Payments Helpline on Tel 0800 585 811.

Subjects covered in this guide

• Introduction
• What is redundancy?
• Avoiding redundancies
• Staff selection - non-compulsory
• Staff selection - compulsory
• The redundancy consultation process
• Rights of redundant employees
• How to help redundant employees
• Potential problems following redundancy

 

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