Redundancy rights for workers losing their jobs as pandemic takes its toll on the economy
Jasmine Patel discusses the rights of workers facing redundancy as a result of economic difficulties caused by the COVID-19 pandemic.
Posted on 26 August 2020
As we head into a potentially serious recession, some employers in the UK are now finding that they can no longer continue to employ some or all of their staff. it is important that individuals know their rights and this blog aims to help individuals who may be affected, to gain a better understanding of where they stand and what they may be entitled to if they are placed at risk of redundancy and/or made redundant.
The Coronavirus Job Retention Scheme – being placed on “furlough”
If your employer informs you that you are at risk of redundancy, and you have already been placed on the Coronavirus Job Retention Scheme by your employer for at least three consecutive weeks between 1 March and June 2020, it may be worth exploring with them whether they could place you on the Coronavirus Job Retention Scheme again, rather than making you redundant. This means placing you on “furlough” during the period that there is no work for you and paying a proportion of your salary. Further details about this scheme can be found here.
This scheme is due to end at the end of October 2020.
If your employer does not agree to place you on furlough and proceeds with a redundancy process, it is important to note the following.
Your employer is entitled to dismiss you for redundancy if your job is genuinely redundant and your employer follows a fair redundancy process.
- If your job is not redundant and/or a fair process has not been followed, you may have a claim for unfair dismissal. This is however, only if you have worked for your employer for two years or more.
In order to assess whether your dismissal for redundancy is fair the following should be considered:
Is there a genuine redundancy situation?
A genuine redundancy situation can occur where there is going to be: a business closure; a workplace closure (where a site is being closed for example); or a diminished requirement of the business for employees to do work of a particular kind.
Is your employer following a fair redundancy selection process?
In order to undertake a fair selection process, your employer will first need to identify the individuals who are at risk of redundancy and place them in a “pool”.
It will then need to decide which individuals within this pool should be provisionally selected for redundancy by using selection criteria. For example, your employer may decide to select individuals based on their length of service, attendance record and performance.
It is important your employer uses objective criteria when undertaking this exercise, otherwise the process may be unfair.
If you think your employer has used selection criteria which are not fair and/or which are discriminatory you may be able to challenge its selection process and potentially bring a claim.
Is your employer properly consulting with you?
If you are placed at risk of redundancy, your employer should consult with you about your potential redundancy. This will usually entail holding (virtual) meetings to discuss some or all of the following with you:
- The ways in which your employer could avoid making you redundant. This is also your chance to suggest ways to avoid you being made redundant.
- The reasons why you were placed in the pool and selected and the criteria which were used during the selection process.
- Any suitable alternative positions which may be suitable for you.
Is your employer offering you suitable alternative employment?
If there is suitable alternative employment available, your employer should consider you for it. Your employer may offer you a chance to work in the suitable alternative role on a four-week trial period to see if it is suitable for you.
If you unreasonably refuse an offer of suitable alternative employment you may lose your right to a statutory redundancy payment.
Remedies – Unfair dismissal
If a claim for unfair dismissal is successful, the tribunal can award compensation for financial loss (including pension loss) up to £88,519 or 52 weeks’ gross pay (whichever is lower) in addition to a basic award calculated by reference to age and length of service. The basic award is however offset by any statutory redundancy payment received.
Time limits – Unfair dismissal
The time limit to start the process to bring a claim for unfair dismissal is three months minus one day from your termination date. This can be tricky to work out so it is worth obtaining advice on this as soon as possible.
To start the process to bring a claim you must contact Acas for a process called Early Conciliation.
If you think you were selected for redundancy because of, or for a reason connected to, your age, disability, pregnancy, race, sex, sexuality or other characteristic protected in law you may have a claim against your employer for discrimination.
Bringing a claim for discrimination is not dependent on your length of service (unlike unfair dismissal claims) and compensation is not capped at a particular level unlike unfair dismissal compensation. You can also claim compensation for injury to feelings and, in some cases, injury to health.
Time limits – Discrimination
The time limit to start the process to bring a claim for discrimination is three months minus one day from the act of discrimination.
Where there has been a continuing course of discrimination you may be able to start the process to bring a claim within three months minus one day of the last act of discrimination.
Again, this can be tricky to work out so it is worth obtaining advice on this as soon as possible. To start the process to bring a claim you must contact Acas for a process called Early Conciliation.
If you are one of 20 or more employees who your employer is proposing to make redundant within a period of 90 days or fewer, your employer will have a duty to collectively consult. This means that the consultation on your redundancy should take place between your employer and an appropriate representative.
Who should your employer consult with?
If a duty to collectively consult arises, your employer must consult with either:
- Representatives of a recognised trade union
- Elected employee representatives who are specifically elected for the purpose of consultation on the proposed redundancy. Where there is no recognised trade union in your workplace, and no standing body of employee representatives, your employer is required to arrange an election of employee representatives and to comply with the rules of election.
- A standing body of elected or appointed employee representatives who were not specifically elected for the purpose of redundancy consultation.
What should the consultation consist of?
The consultation process should include discussions between your employer and your representatives about ways in which your employer may be able to avoid making people redundant or reduce the number of employees being made redundant. The consultation must be meaningful and consider carefully any proposals put forward.
Protective Awards – Bringing a claim for failure to collectively consult
You may be entitled to a “protective award” from the Tribunal of up to 90 days’ pay (uncapped), if your employer has failed to do one of the following:
- Failed to inform and consult a recognised trade union. A claim in this respect can only be brought by the trade union.
- Failed to inform and consult other appropriate employee representatives. A claim in this respect can only be brought by one or more of the appropriate representatives to whom the failure relates.
- Failed to arrange an election of employee representatives or to comply with the rules on elections. A claim in this respect can be brought directly by any employee who has been dismissed as redundant or any employees who were affected. This means that you can bring a claim for a protective award even if you are not actually made redundant but have only been affected by the failure by your employer to inform and consult. Your award however may be lower in this situation than if you were made redundant.
The time limit to start the process to bring a claim for a protective award is three months minus one day from the termination date of the last person who was dismissed within the relevant 90 days period.
This can be tricky to work out so it is worth obtaining advice on this as soon as possible. To start the process to bring a claim you must contact Acas for a process called Early Conciliation.
Your entitlements on being made redundant
If you are fairly made redundant you may be entitled to one or more the following:
- Statutory redundancy pay. You can work out what you may be entitled to using the government’s calculator.
- Enhanced redundancy pay: you may be entitled to an additional redundancy payment. It is worth checking your contract to see if your employer has agreed it will pay you an additional amount if you are made redundant. Your employer may also agree to pay you a higher amount of redundancy pay on the condition that you sign a settlement agreement.
- Notice Pay: you should check your contract to see what notice pay you are entitled to. Your employer is required to pay you at least one week per year of service up to 12 years.
N.B. If you were furloughed before being made redundant and your dismissal for redundancy occurred after 31 July 2020, your notice pay and statutory redundancy payment should be calculated based on your pre-furlough pay.
- Payment in lieu of accrued but untaken holiday: if you have accrued holiday but not taken it, you may be entitled to be paid for these days.