What does redundancy mean?

Redundancy for the purposes of the reason for dismissal has a statutory meaning found in s139 ERA 1996. In simple terms a redundancy occurs where an employee is dismissed because his employer has ceased or intends to cease to carry on in business altogether or at that particular location.  It can also occur where there is a reduction in the number of staff needed to carry out work of a particular kind or at a particular location which is a reduction in head count rather than all out closure.

In redundancy situations, employers need to inform the employees at the earliest opportunity and consult with them.  Those employees with two years service will be entitled to a statutory redundancy payment and all employees are entitled to receive notice of dismissal.

Where there are more than 20 redundancies proposed at any one establishment there is a more stringent procedure that must be followed and set periods of consultation.  This is called collective consultation.

If you do not feel the process followed has been fair or that you have been unfairly selected you should seek advice as if you wish to challenge this, it would be an unfair dismissal claim with a time limit of three months from the effective date of termination.

Written by
Edward Aston
14th January 2014

 

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