A redundancy scenario arises if there has been a business closure, a workplace closure or there is a reduced requirement for employees to perform work of a particular kind.
Redundancy is a potentially fair reason for dismissal. It is however, essential that employers carry out a fair redundancy procedure, or the dismissal may be deemed unfair even if there are genuine grounds for making employees redundant.
The Rix & Kay Employment Team can assist you in connection with a full redundancy procedure, ensuring that you carry out a fair procedure every step of the way.
While employers can offer voluntary redundancy to their employees, they need to make sure that they don’t become contractually bound to go through with it, for example, if an employee who they wish to retain indicates that they wish to take voluntary redundancy.
Statutory Redundancy Payments
Depending on an employee’s length of service, age and the details in their employment contracts, former employees may be entitled to redundancy payments, holiday pay or unpaid wages and notice pay. Redundancy pay is based on weekly earnings before tax (gross pay), there are limits to the weekly amount and it is only paid up to a maximum of 20 years’ service. The up-to-date redundancy pay rates are available on the Government’s website.
Certain employees will be entitled to Statutory Redundancy Pay (SRP) in the event they are made redundant. In order to be eligible for SRP, employees must have two years’ continuous employment by the expiry of their notice period. SRP is calculated using the employee’s employment start date and termination date, their age and weekly earnings before tax (gross pay). Further information on the Government’s SRP rates can be found here.
In addition to SRP, employees may also be entitled to any accrued but outstanding holiday, unpaid wages and/or notice pay.