Redundancy Tribunal Advice

26 November 2020

If an employer breaches employment law and mistreats employees, they can seek to take them to an employment tribunal and claim compensation.

Employees can bring various claims to court, depending on the specifics. Here, we are going to focus on redundancy.

With the coronavirus situation remaining a key problem across the UK, and government help changing, many businesses may increasingly consider making staff redundant.

The trouble is, this can be a tough area of the law to get right – and getting it wrong can lead to you going to an employment tribunal. Here’s all you need to know about redundancy tribunals.

Redundancy tribunal causes

If there is no genuine reason for redundancy, you may face redundancy tribunal claims.

Employment law defines a redundancy situation arising in the following three circumstances:

  • Business closure
  • Workplace closure
  • Diminished requirement to conduct work of a particular kind.

However, previous redundancy tribunal cases have gone further than this, finding serious issues arising not just in the decision to make an employee redundant, but the procedure used by the company to get to this point.

Unfair dismissal

The first claim to be aware of is unfair dismissal. Employment law protects employees who have worked for a business at least two years from unfair dismissal. This is simply dismissal which is not justified by a legally fair reason.

A dismissal for redundancy is a potentially fair reason for dismissal. However, you will need to show that a redundancy was the ‘real’ reason for a dismissal and is not being used to cover up another reason. You will also need to show that you acted reasonably, in all circumstances.

If not, your redundancy will qualify as an unfair dismissal.

Law entitles employees who have successful claims to a basic award for unfair dismissal. This is a year’s pay or a maximum of £88,519, whichever is lower.

This will be cancelled out by the amount of statutory redundancy payment received.

They may also be entitled to an additional compensatory award for financial loss, although this can be reduced by a contractual redundancy payment provided in addition to the statutory amount.

Automatic unfair dismissal

Automatically unfair dismissal occurs when the dismissal violates an employee’s statutory legal rights.

Dismissing or selecting individuals for redundancy on prescribed grounds such as them blowing the whistle, or being pregnant, is considered automatically unfair and does not need any length of service for a claim to be brought.

Here, compensation will be provided as set out above for unfair dismissal.

Discrimination

In instances of a redundancy connected solely to pregnancy or maternity, or to another protected characteristic, you could also face an additional discrimination claims.

There is an uncapped compensation for an act of discrimination case award, and can also include an additional award for injury to feelings.

Failure to inform and consult

If you are making over 19 members of staff redundant, you have a legal duty to consult with them over the redundancy.

Failure to do this can result in a claim for failure to inform and consult, which may lead to imposing a ‘protective award’.

A ‘protective award’ is an order to the employer to pay remuneration to their staff for a ‘protected period’. Employees receive a week’s pay for each week in this period, which is not subjected to any cap.

The ‘protected period’ begins on the date of the first of the dismissals, or the date of the award itself, whichever is earlier. Tribunals will then determine how long the period should go on for. There is a 90-day maximum in all cases.

Failure to provide statutory redundancy pay

Law entitles employees who have worked for you for at least two years to a statutory redundancy payment. It sets the rates depending on their age and length of service. When considering a claim for failure to provide this, the tribunal will determine the amount it entitles them to.

Employees will lose the right to a statutory redundancy payment unless one of the following four events occurs within six months:

  • They get the payment
  • They make a written claim for the payment to their employer
  • They refer the situation to the employment tribunal
  • They present a claim of unfair dismissal to the employment tribunal.

Redundancy tribunal time limit

They must bring claims for unfair dismissal and discrimination within three months of the event. Unless the tribunal rules it was not reasonably practicable for the employee to bring a claim forward in that time.

They must make a claim for a failure to inform and consult either before the last of the proposed dismissals occurs or within three months of the day of this dismissal.

Again, tribunals may extend this time period if it was not reasonably practicable to bring a claim.

Claims for statutory redundancy pay have no time-limit, provided one of the four events occur as outlined above.

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