With tough economic times forecast to continue, employers are being warned that redundancy should be a last resort and that they need to tread very carefully. This follows an announcement from the Chartered Institute of Personnel and Development (CIPD) that widespread job losses are on the way.Despite the UK being technically out of recession, the CIPD has forecast that one in three public sector employers will make redundancies this quarter and that further job losses are predicted.
It is important that employers do not to cut corners when dealing with redundancies, if they want to avoid the potential threat of an employment tribunal.
A redundancy situation only arises when an employee is dismissed for one of three reasons:
- The business closes down
- The employer closes down the workplace at which the employee is employed
- There is a reduced need for workers doing the work the employee is employed to do.
All employees with two years’ service are entitled to a statutory redundancy payment. Statutory redundancy payments are calculated according to the number of years a person has worked (service is counted up to a maximum of 20 years), their age and their weekly pay (‘week’s pay’ is currently capped at £380 before tax each week).
Redundancy pay of up to £30,000 is usually free of tax.
Anne Vincent, a solicitor with Gabbs who specialises in employment law cases states:
“Employers should seek professional advice if they are unsure of their position, as the wrong approach may result in a costly claim for unfair dismissal.
“Redundancy is a complex issue and is full of potential pitfalls for the unwary employer. The most common mistakes include not following the right procedure or timetable, using unfair redundancy selection criteria or methods, and failing to consult properly with the individuals concerned.”
For further information or advice, please contact Anne Vincent on: avincent@gabbs.biz
