Collective Redundancies Regulations

Redundancy occurs when employers need to reduce their workforce. This loss of jobs can be caused by many factors, from a reduced amount of work being received due to the loss of a large client contract, to the invention of more efficient machinery.

There is a lot of press about unfair dismissal, such as being chosen for redundancy if you are disabled, pregnant, elderly etc. However even if redundancy is fair, you may still be eligible for various benefits including:

• Redundancy pay
• Employer consultation
• Notice period
• Option to move into a different role
• Time off to job search

For redundancy to be fair, an objective way of selecting employees must be used. The most commonly used fair methods are:

• Last in, first out (employees with shortest length of service are selected first)*
• Voluntary redundancy / self-selection
• Disciplinary records
• Staff appraisal
• CV review (assessment based upon skill / qualifications)

*Last in, first out is only a fair method if it does not discriminate against younger people - for example if all employees are of a similar age, or the business has a high turnover of staff such that the length of service does not mirror the age of the employee.

To enable your employer to make a fair decision, you may be asked to reapply for your job. However if you decline to do so, you will still have your existing job until / unless your employer makes you redundant.

Consultation

You are entitled to consultation with your employer if they propose to make you redundant. At this consultation, you should be told the reasons for your proposed redundancy and be able to discuss any alternatives to redundancy.

If 20 to 99 people are to be made redundant at the same time, consultation must commence at least 30 days before any dismissals take effect. If 100 or more redundancies are proposed, this period is extended to a minimum of 45 days.

If less than 20 people are being made redundant at the same time, there is no legal minimum length of time for consultation to take place. However if the consultation is not for a reasonable length of time, or the employer doesn't consult properly or at all, the employee may have cause for complaint to an employment tribunal.

Suitable Alternative Employment

Your employer may offer you suitable alternative employment within the company or any associated company. A suitable alternative must be:

• Similar work to your current job
• Similar working hours and benefits
• Similar location
• Similar status (for example remaining on the management team)

If an employer has suitable alternative employment and they don't offer it to you, this could lead to unfair dismissal. On the other hand you may lose your right to statutory redundancy pay if you unreasonably turn down suitable alternative employment.

You are entitled to a 4 week trial period for any alternative role that you are offered (for example if you decide to try a role which requires you to commute to a different location). If you decide that the new job is not suitable, you must tell your employer during this trial period. This will not affect your right to redundancy pay. If you will need a longer period as the new role will require you to undertake training, this extension must be agreed in writing with your employer before the trial period commences. If you do not give notice during the 4 week trial period, or any agreed extended trial period, you will lose your right to redundancy pay.

Collective Redundancies and Transfer of Undertakings Regulations 2013

From 31 January 2014, new regulations came into effect which have an impact on redundancies. The main changes are:

• Service provision changes are allowed to try to avoid redundancies. However the service involved must be 'fundamentally or essentially the same' as before the change.
• Contract changes can be made to try to prevent redundancies. These have to be agreed with the employee. However changes that would be permitted under the employment contract in any event (e.g. changes to duties, job titles, or under a mobility clause) are allowed

Further Changes Yet to be Implemented

From 31 July 2014, small businesses of 10 or less employees may inform and consult directly with employees in relation to redundancies when there are no recognised union or employee representatives.