Statutory Redundancy Levels: How a Solicitor Could Help
Over the last few years the levels of redundancy in the UK have increased, and it is a sad fact that few people feel completely secure in their jobs. With further cuts on the horizon, particularly in the public sector, it seems likely that more people will be made redundant and will therefore be wondering if they are receiving their full entitlement. It might be heartening to learn that by simply employing the services of redundancy solicitors, someone being made unfairly redundant could increase their entitlement significantly.
Unless you have made a special agreement with your employer, you will have to accept whatever terms your employer has set out in your employment contract. In most cases this is simply the statutory redundancy figure and no more.
In December 2010 the government brought in new legislation to increase the amount an employee receives should they be made redundant. This came into effect on the 1st February. The Employment Rights Order 2010 stated that for the purposes of calculating a redundancy payment, a week's pay should be seen as being a maximum of £400. This was an increase from £380.
Other factors also taken into account when calculating redundancy pay are the age of the employee and the number of years that an employee has been working for the employer. Under current legislation, people who have been working for less than two years have no entitlement for redundancy pay and it is calculated for a maximum of 20 years. The following shows how payments are worked out:
- The employee will receive half a week's pay for each full year of service if they are aged less than 22.
- The employee will receive one week's pay for each full year of service if they are aged between 22 and 41.
- The employee will receive one and half week's pay for each full year of employment if they are aged over 41.
It is clear that for some people these rules are unfair. If, for example, someone has been working for a company for longer than 20 years or earns more than £400 per week, they are likely to receive less than their worth if they are made redundant. The employee may also feel that they have been unfairly dismissed and that the correct procedure surrounding their redundancy has not been taken. In these cases the employee may feel that it is worth their while to employ redundancy solicitors to take up their case.
It is also possible that for people living in a more expensive city such as London, the rules surrounding redundancy pay should be more generous. Not only is the capital more expensive to live in without a steady income, it may also be harder to land a new job. However, London employers are not obliged to offer more generous redundancy packages. It may be possible to argue that this should be the case through a redundancy solicitor.
A redundancy solicitor will expect the employee to show that the proper procedure was not carried out by the employer in respect of their redundancy. Any employer implementing redundancies needs to take the following steps to remain within the law:
- Employees should be consulted about the impending redundancy prior to being made redundant. They should be given the option of voluntary redundancy, transfer, new training or job share. If this is not possible, it should be made clear why.
- The consultation period should be for 90 days if between 20 and 99 employees are made redundant, but first dismissal can take place after 30 days. If more than 99 employees are to be made redundant, the first dismissal should take place after 90 days. When fewer than 20 employees are made redundant the employer is not obliged to consult.
- There should be fair selection criteria.
- The redundant person should be written to and invited to attend a meeting and allowed to put their case against being dismissed. They should also be allowed to appeal.
Redundancy solicitors will often be able to get a special payment for the redundant employee if these procedures have not been followed. In some cases a compromise agreement will need to be made, whereby the employee agrees to receive extra money in return for not following up an unfair dismissal claim. In many cases, this can be the best way to receive an enhanced redundancy package.
