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Telephone: 0131 662 6988
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23 Cramond Glebe Rd
Cramond Village
Telephone: 0131 336 1619

Free EnquiryBeing Made Redundant?

What is redundancy and should you accept it?

If you are told that you are going to be dismissed for redundancy reasons, what are your legal rights? You need to consider whether the redundancy is a genuine redundancy and whether the payment offered is fair. This article should help you to do that.

Reasons For Redundancy

The general reason for redundancy is that your employer wishes to reduce their work force. This can happen when the business is closing down, or the job that you undertake is no longer a necessary part of the process due to efficiency improvements.

It will not count as a redundancy if your employer immediately replaces you with somebody else. This could lead to a larger compensation claim for you.

The Three Main Reasons For Redundancy

The three valid reasons for redundancy are:-

  1. Your employer stops carrying on their business (this does not include when they transfer it to a new owner);
  2. Your employer stops trading from the location where you are employed and moves the business elsewhere; and
  3. Your employer’s business no longer needs any employees or as many employees as it needed before (normally due to changes in the processes).

Redundancy normally happens when your employer has to cut costs to make the company viable and profitable. Obviously in testing economic times, redundancies are far more prevalent and a lot of people will lose their job by way of redundancy.

Duty To Consult

If your employer is considering making twenty or more employees redundant within a 90 day period this is known as a collective redundancy. In these situations they have to consult with employee representatives to discuss who should leave.

Individual Redundancies

In all other cases where less than twenty people are being made redundant, your employer has to follow the correct redundancy procedure which includes:-

  • Selecting the employees fairly;
  • Warning you and consulting you about your redundancy;
  • Your employer taking reasonable steps to find employment for you elsewhere;
  • Providing you with the correct amount of redundancy pay and notice; and
  • Your employer must consider any other alternatives to redundancy.

What Should You Do?

If you believe your employer has failed to follow the correct procedure or that the reasons provided for redundancy are not genuine, you should consider taking legal action. You could take a claim to the Employment Tribunal or you could instruct a specialist employment solicitor to investigate the redundancy and to advise you whether you can make a claim for compensation.

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