A redundancy situation arises where there is either:
- Closure of business
- Closure of the workplace
- Changes in the requirements of the business
As well as establishing one of the reasons above, an employer must demonstrate a fair procedure when consulting with and selecting employees to be redundant.
If you have been employed for 2 years or more, you are entitled to a statutory payment determined upon your service length. Instead of paying a redundancy amount, your employer may offer alternative employment. If the offer of alternative employment is rejected, the right to the payment is lost. However, where the alternative employment offer is unreasonable/unsuitable, employees can reject it and claim their redundancy payment. Alternative employment is usually subject to a trial period; therefore, you should act quickly if you are looking to reject an offer and claim your redundancy payment instead.
Sometimes redundancy is used to disguise the real reason for terminating employment. In these situations, it is possible that the dismissal would be viewed as unfair or discriminatory, which would entitle you to significantly more compensation. These situations are complex, and advice should be sought where you are concerned about the process or implications of any decisions made.
Employees should note that the limitation period for claiming redundancy payments is 6 months from the termination of employment. However, if you suspect that the redundancy selection or process has been unfair, you will need to ensure you act in accordance with the limitation period for unfair dismissal, i.e. bring your action within three months less than one day from the date of your dismissal.