Redundancy law

Redundancy_1

 

What is redundancy?

 

Redundancy is defined in Section 139(1) Employment Rights Act 1996. It is where there is an imminent or current;

  • closure of a business
  • closure of a workplace
  • reduction in the need for employees

Redundancy is a potentially fair ground for dismissal.

 

Resources Available

Discrimination at work

Employee Representative Guide for non-union workplaces

How to Write a Grievance That Gets You What You Want

How to write a Grievance about discrimination at work

How to Write a Grievance About Changes to Your Employment Contract

Schedule of Loss Spreadsheet for unfair dismissal

Schedule of loss spreadsheet – Discrimination

 

How to prepare a schedule of loss for unfair dismissal

DOCUMENTS, FORMS AND LETTER TEMPLATES

 

 

 

Acts of Parliament (Statutes)

The main statutes on redundancy are;

The Employment Rights Act 1996

  • Section 52 – Right to time off to look for work or arrange training.
  • Section 53 – Right to be paid for time off under section 52
  • Section 98 – Potentially fair reasons for dismissal
  • Section 105 – Fairness of a redundancy dismissal
  • Section 138 – No dismissal in cases of renewal of contract or re-engagement
  • Section 139 – Definition of a redundancy situation
  • Section 205A – Employee Shareholders are not entitled to redundancy payments

The Equality Act 2010

Makes it unlawful to select a person for redundancy on the basis of any of the protected characteristics, trade union membership or the refusal of a protected shop worker to work on Sundays.

 

The Trade Union and Labour Relations (Consolidation) Act 1992 

  • Section 188 – Duty of employer to consult
  • Section 188(A) – Requirements for the election of employee representatives under section 188(1B) (b) (ii)
  • Section 189 – Complaining to an employment tribunal and protective awards
  • Section 190 – Entitlement under a protective award
  • Section 191 – Termination of employment during protected period
  • Section 192 – Complaint by employee to an employment tribunal
  • Section 193 – Duty of employer to notify the Secretary of State of certain redundancies
  • Section 194 – Offence of failure to notify
  • Section 195 – Dismissal for these purposes means redundancy
  • Section 196 – Definition of employee representative
  • Section 197 – Power of Secretary of State to vary S188, S189 & S193
  • Section 198 – Power of the Secretary of State to adapt provisions in case of a collective agreement
  • Section 199 – Issue of Codes of Practice by ACAS

 

European Union Directives

The main EU Directives are; 

Collective Redundancies Directive 98/59/EC

This EU Directive requires employers to consult staff representatives in the case of collective redundancies. It specifies the points which these consultations must cover and the useful information which the employer must provide during the consultations. It also establishes the procedure and practical arrangements for collective redundancies.

Information and Consultation Directive 2002/14/EC

The purpose of this Directive is to establish a general framework for improving the information and consultation rights of employees in undertakings within the European Community. There are two important principles to this;

  • Practical arrangements for information and consultation must be defined and implemented in accordance with national law and industrial relations practices in individual Member States;
  • When defining or implementing this framework, employers and employees’ representatives must work in a spirit of cooperation and with due regard for each other’s rights and obligations.

It applies to undertakings with at least 50 employees in a Member State or to establishments with at least 20 employees in a Member State. The choice is left to the Member States, which also establish the manner in which the number of employees is calculated.

The European Works Council Directive 94/45/EC

Applies to all companies with 1,000 or more workers, and at least 150 employees in each of two or more EU Member States. It obliges them to establish European Works Councils to bring together workers’ representatives (usually trade unionists) from all the EU Member States the company operates in, to meet with management, receive information and give their views on current strategies and decisions affecting the enterprise and its workforce.

 

Regulations 

The main Regulations are;

The Information and Consultation of Employees Regulations 2004 (SI 2004/3426)

Gives employees the right to be informed about their employer’s economic situation and to be informed and consulted about their employment prospects.

The Collective Redundancies and Transfer of Undertakings (Protection of Employment) Regulations 1995 (SI 1995/2587)

The Trade Union and Labour Relations (Consolidation) Act 1992 was amended by these regulations which requires employers to consult about redundancies in circumstances where it is proposed to dismiss 20 or more employees at one establishment over a period of 90 days or less.

The Collective Redundancies and the Transfer of Undertakings (Protection of Employment) (Amendment) Regulations 1999 (SI 1999/1925)

The Trade Union and Labour Relations (Consolidation) Act 1992 was amended by these regulations which require that consultation should be with a recognised trade union, or with other elected representatives of the affected employees where no trade union is recognised.

The Collective Redundancies (Amendment) Regulations 2006 (SI 2006/2387)

These regulations amend Section 193 Trade Union and Labour Relations (Consolidation) Act 1992 to ensure that an employer proposing collective redundancies must notify the Secretary of State at least 30 days (90 days if 100+ employees are being made redundant) before giving notice to terminate an employee’s contract of employment for redundancy.

The Agency Workers Regulations 2010 (SI 2010/93) 

Schedule 2 of these regulations amend Section 188 of the Trade Union and Labour Relations (Consolidation) Act 1992 (TULRCA), such that an employer carrying out a collective redundancy consultation or pre-transfer consultation under regulation 13 of the Transfer of Undertakings (Protection of Employment) regulations 2006 (SI 2006/246) (TUPE 2006), must first give the appropriate employee representatives certain information in writing.

That information must include:

  • The number of agency workers working temporarily for and under the supervision and direction of the employer.
  • The parts of the undertaking in which they are working.
  • The type work they are carrying out.

Maternity and Parental Leave etc. Regulations 1999

Regulation 10 says a woman on maternity leave at risk of redundancy must be offered any job that is suitable and available.

 

Orders

The Trade Union and Labour Relations (Consolidation) Act 1992 (Amendment) Order 2013

Where an employer intends to make 100 or more employees redundant within a 90-day period:

  • the minimum period before the first redundancy can take effect is reduced from 90 to 45 days after consultation starts;
  • employees on fixed-term contracts “which have reached their agreed termination point” are excluded from collective redundancy consultation obligations; and
  • the period for lodging a form HR1 reduced from 90 to 45 days before the first redundancy takes effect.

 

Provisions for the armed forces and civil service

These provisions caps the redundancy pay-outs to civil servants at 15 months’ salary.

Armed Forces Redundancy Scheme 2006 Order 2006 (SI 2006/55) 

The Armed Forces Redundancy Scheme 2006, the Armed Forces Redundancy Etc. Schemes 2010 and the Armed Forces Pension Scheme 2005 (Amendment) Order 2011

Superannuation Act 2010 (Repeal of Limits on Compensation) Order 2010 (SI 2010/2996)

 

 

 

Best of the web

 

Redundancy – Your rights

Redundancy procedures your employer must follow

Facing redundancy

Your legal rights when facing redundancy

 

Disclaimer

This resource is published by Employee Rescue Limited. Please note that the information and any commentary on the law contained herein is provided for information purposes only. The information and commentary does not, and is not intended to, amount to legal advice. Employee Rescue accepts no responsibility for any loss occasioned to any person acting or refraining from action as a result of the material contained in this publication.

Further specialist advice should be taken before relying on the contents of this publication. You can send an e-mail to thelawyers@employeerescue.co.uk for such specialist advice if required.

Case Study

In the Scottish case of Collins v First Quench Retailing Ltd [2003], Ms Jacqueline Collins was awarded £179,000 from her employers when the off-license she managed was robbed. Ms Collins had been the manager of Victoria Wine, run by First Quench Retailing, for about ten years. When Mrs Collins started in the shop she had been concerned about security and raised this with management. Since 1977 there had been 13 reported crimes at the shop, including five thefts, one minor assault, one serious assault and one assault with intent to rob. There were two armed robberies in 1994 and four... Read More
Ms Jacqueline Collins was awarded £179,000 from her employers when the off-license she managed was robbed.Collins v First Quench Retailing Ltd
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