Can They Cap my Compulsory Redundancy?

Q.

I am being made compulsorily redundant after 18 years, I am 46. The voluntary offer was on the basis of 18 years, which I turned down. Can they then cap it at 12 years for compulsory redundancy if I haven't taken voluntary redundancy?

A.

Firstly it must be pointed out that almost every redundancy situation is different to any other. They can also be different for individuals in the same company, as payouts depend on age and length of service as well as many other factors. It is utterly essential that people facing redundancy, be it compulsory or voluntary, get independent advice about their individual situation.

Sources of advice include:

• government websites:
  • www.berr.gov.uk
  • direct.gov.uk
  • businesslink.gov.uk
• Citizens Advice Bureau
• employment law solicitors
• trade unions

In fact the Business Link website has an interactive calculator that allows people to work out the minimum redundancy pay out that they will be entitled to under the law.

Redundancy Offers

Having said that, the answer to the question is almost certainly yes, and it's not unusual for a company to act in this way. A voluntary redundancy offer is usually better than a compulsory redundancy offer because it is much easier, from an administration point of view, to perform a voluntary redundancy than a compulsory one.

The usual scenario is that a company will make a very good first voluntary redundancy offer. If there are further requests for voluntary redundancy, they will be less attractive than that first offer. Finally, if a company is in dire straits and needs to make people compulsorily redundant, that offer is unlikely to be anywhere near as good as a voluntary offer.

The general rule of thumb therefore is that it is best to accept the first offer of voluntary redundancy to make the best of a situation from your own point of view.

Comparing Redundancy Offers Against the Legal Minimum

In the situation described here, it's not completely clear from the information to hand whether or not a reduction in the number of years of services is a valid way of calculating what is due to you. It's far better to find out exactly what minimum amount you are entitled to and compare any offers against that.

If it is below the legal minimum you can appeal to an employment tribunal although you must do this quickly. There are time limits that apply to appeals against redundancy payouts.

Note that redundancy payments are governed by what is termed 'continuous employment' and there are a number of situations where you might consider that you have been continuously employed but the law would not see it in the same way. This is particularly the case if a company is bought or taken over, and the way that employees were transferred might mean that legally there was a break in the period of employment.

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