The Redundancy Survival Guide

Assess Your Legal Rights, Explore Career Options and Turn Redundancy Into Opportunity

Rebecca Corfield, Barry Cushway

• Publisher: Kogan Page
• Year: 2009
• ISBN:
  9780749459499
• Edition: 1
• Topic: Personal Development
• Subtopic: Careers

When employees are made redundant they often have no idea about their rights, how to negotiate a severance package or get compensation and how to move on afterwards to a new job. The Redundancy Survival Guide will take you through what can often be a traumatic time, with step by step advice on establishing where you stand legally, planning future options, maximising the benefits available, assessing skills and lifestyle options and finding a new job. It will help you to feel reassured and see redundancy as an opportunity and a way of making positive changes to your life.

1

The meaning of redundancy

The significance of redundancy

While there may be 50 ways to leave your lover there are only six ways in which you can legally be sacked or, in the usual jargon, have your employment terminated. These are:

• misconduct;
• capability – ie inability to carry out the job to the required standard;
• redundancy;
• where continuing to work would break the law in some way, eg if someone employed as a driver lost his or her licence;
• retirement;
• some other substantial reason not covered in the above categories.

The key heading we are concerned with is redundancy. If you have lost your job or are in danger of doing so it is important to be clear about the reason, because losing your job through redundancy brings with it a number of rights and does not carry the stigma of some of the other reasons for termination. In fact losing a job because of redundancy should really be regarded as an opportunity. Personal experience indicates that redundancy can lead to new opportunities, to discovering resources you did not know you had and perhaps finding more satisfying employment or self-employment. Moreover, this will be underpinned by a tax-free payment from your last employer.

Legal definition

The common legal definition of redundancy originated in the Redundancy Payments Act 1965 and is now contained in section 139 of the Employment Rights Act 1996. This states that an employee is dismissed because of redundancy if the dismissal is wholly or mainly attributable to:

1. the fact that his employer has ceased, or intends to cease.
   1. to carry on the business for the purposes of which the employee was employed by him, or
   2. to carry on that business in the place where the employee was so employed, or
2. the fact that the requirements of that business –
   1. for employees to carry out work of a particular kind, or
   2. for employees to carry out work of a particular kind in the place where the employee was employed by the employer have ceased or diminished or are expected to cease or diminish.

To decide whether or not you are in a situation that involves redundancy, it is necessary to consider the various elements of this definition.

Conditions applying to redundancy

You need to be an employee

Although it may seem obvious, not everybody who works for a company is an employee of that company – agency staff for example. However, if you have a written contract of employment then the answer is straightforward and you would be entitled to all legal rights applicable to any employee being made redundant.

Your employment should have been or be likely to be ended by the employer

You can only claim redundancy rights if your employment is ended by your employer. If you voluntarily resign you would generally lose any right to claim that you were made redundant. It was your choice to leave. The situation is the same if you leave ‘by mutual agreement’. Of course any good employer who feels that redundancies may be unavoidable might ask for volunteers. In such a case, although by volunteering you are actually resigning there is normally an incentive offered, such as an enhanced redundancy payment in addition to your normal legal rights, to encourage you to do so.

Should you volunteer to be made redundant?

Where an employer does ask for volunteers there are usually conditions attached to this request. Prime among these is that the employer will usually reserve the right not to agree to some requests as doing so might deprive the company of people with essential skills or experience. You could find yourself in a situation where although you would like to leave on redundancy terms you are not allowed to do so. This can be difficult for both parties.

It can happen that when you know that redundancy is a possibility you start looking round for other opportunities, and if you have found such an opportunity it can then be frustrating to realize that you might have to resign without the prize of a (potentially tax-free) redundancy payout. This is naturally demotivating and relationships can become strained. The temptation in this situation is to try to work your ticket by being awkward enough to make the employer let you go. However, this is a dubious course to pursue and you could end up losing your job on grounds of conduct or performance if you push matters too far. There is no point in souring relationships if you can avoid it as you never know when this could come back to haunt you, and you may need a reference. There is a saying in the theatre that you should always be nice to people you meet on your way up as you may meet those same people again on your way down.

What if the employer tries to make you resign?

The reverse position is when the employer wants you to leave, for whatever reason, but may be reluctant to end your employment for fear of ending up in an employment tribunal or perhaps to avoid making redundancy payments. In these circumstances the employer may be tempted to put pressure on you to resign, for example by giving you some of the less desirable jobs, by leaving you out of meetings, by reducing your bonus payments or by worsening your working conditions. However, most employers these days are aware that if they push things too far and you are forced to resign they could end up facing a claim for constructive dismissal (see Chapter 5). This occurs when you resign because you feel that the employer has behaved so unreasonably that you are left with no other choice.

In reality this is not much of threat, because to bring such a claim you would first have to resign and then you would have to bring a case against the employer and win it. Even so, few employers will push matters so far that they might end up facing such a claim. They can, however, still make life difficult but if you do end up resigning you solve their problem. The rule therefore is never to resign but leave it to the employer to make a reasonable offer.

Can the employer change your working hours or pay as an alternative to redundancy?

Perhaps a more common scenario that could also potentially lead to a claim for constructive dismissal is where the employer is not actually trying to lose staff but rather is seeking a reduction in working hours or pay to enable the organization to cope with a loss of income or profits. If you voluntarily agree to such changes there is no problem, but if the employer unilaterally imposes such changes on you this is likely to be a fundamental breach of the contract of employment and potentially constructive dismissal if you resign as a result.

Have you actually been dismissed?

There are also circumstances in which it may not be clear that you have been dismissed. For example if, in a fit of pique the manager says ‘Get out of here, I’m sick of the sight of you’ or words to that effect, does that amount to a dismissal? It is in fact most unlikely that an incident of that kind would be treated as a dismissal, and if it were it would almost certainly be an unfair one. For a dismissal to be effective there would normally need to be some written notification of it, as most employees are entitled to a written statement of the reason for dismissal. You can of course be dismissed without any such written notification and if, for example, the employer just stopped paying your salary or wages, that would be a strong indication that the employment had ended.

If you are working on a fixed-term contract with a definite expiry date and that contract is not renewed by the employer, that also amounts to a dismissal. Whether or not you would be entitled to a redundancy payment would depend on how long the contract was for and how long you had been working continuously for that employer.

The employer could decide to require you to do a different job. If a change of role is suggested to you and you agree to it, then there is no issue. If, however, the employer arbitrarily changes your job without your agreement, then you have in effect been dismissed from your previous job and could be entitled to a redundancy payment.

The requirement for the work you are employed to do must have ceased or diminished at that location

Where is your normal place of work?

Your normal place of work is a key consideration. If the organization has closed down or the business has ceased trading or is in the process of doing so, then the matter is relatively clear-cut as all locations will close and any employees will be redundant as a result of the closure. Similarly, if the organization continues in existence at other locations but is being closed at the place you are employed, that is also a relatively clear-cut redundancy.

The place you are employed at should be set out in your statement of employment particulars, which all employers must provide. Although there may be mobility provisions (requiring you to work in other locations from time to time) in the statement or elsewhere in your employment contract (the contract is not usually just one document but can include any offer or other letters, staff handbook, written and verbal agreements etc), what counts for the purpose of determining redundancy is your normal place of work.

If you have only ever worked at one location there should be no problem in concluding that this is your place of work. There can be complications, however, if you have been required to work at several different locations, but generally the employment contract should be able to clarify the position. Whether or not redundancy applies depends on the wording of any mobility provisions, but generally it is likely that a change of location will give rise to a potential redundancy claim.

What if the company remains open at your workplace but requires fewer staff?

The position is less straightforward where work has not ceased but has diminished. A reduction in work may mean that the employer does not now need to employ the same number of people. There is no particular rule quantifying how much this reduction needs to be and it is for the employer to decide how many and what type of employees are needed to achieve the company’s business objectives. In fact there does not need to have been a loss of business; the employer can just decide to reorganize the work in such a way that fewer staff are now required to achieve the same output. The application of new technology and changes to systems and procedures can have this effect.

There...

Table of contents

• Cover page
• Title page
• Copyright
• Table of Contents
• Introduction
• 1. The meaning of redundancy
• 2. Your redundancy rights
• 3. Assessing your position
• 4. Negotiating a severance package
• 5. Getting compensation for unfair dismissal
• 6. Managing your money
• 7. Living in the present
• 8. Starting again
• 9. Conducting a job search
• 10. Self-employment
• 11. Conclusion
• Appendix 1: Statutory redundancy pay table
• Appendix 2: Useful contacts
• Further reading from Kogan Page