An employer having to make someone redundant is a difficult situation.
However, if an employer follows the correct procedures, they will get the correct result.
To make a position redundant, it’s not enough to be able to satisfy yourself the role is redundant.
Three key areas will be considered:
- If there was a genuine reason for redundancy
- Was there a fair selection process
- Was a fair consultation process carried out
What’s a genuine reason for redundancy?
Section 7(2) (a) of the Redundancy Payments Acts outlines five grounds where a redundancy can be deemed as genuine.
- The employer has ceased or intends to cease to carry on the business.
- Requirements of the business for the employee to carry out work of a particular kind has ceased or diminished.
- The employer decides to carry out the business with fewer or no employees.
- The employer decides work being done is to be done in a different manner, for which the employee is not qualified or trained to do.
- The employer decides that the work being done is to be done by a person who is capable of doing other work for which the employee is not sufficiently qualified to do.
Where your reasons for redundancy fall under one (or more) of the above five it is important to follow through with a redundancy procedure. This ensures fair procedure and reduces the risk of unfair selection and any potential unfair dismissal claims.
Employers must follow certain processes when an employee is made redundant. Redundancy occurs where loses their job due to circumstances such as the closure of the business or a reduction in the number of staff. The Redundancy Payments Acts 1967–2014 provide a minimum entitlement to a redundancy payment for employees who have a set period of service with the employer. Not all employees are entitled to this statutory redundancy payment, even where a redundancy situation exists.
In addition to the provisions in the legislation as regards collective redundancies the employer must follow certain fair procedures.
These include giving at least 2 weeks’ notice and paying redundancy payment on the date of dismissal.
There are also various procedures when selecting people for redundancy, alternative work and time off.
Selection for Redundancy
When selecting a particular employee for redundancy, an employer should apply selection criteria that are reasonable and are applied in a fair manner.
The employee is entitled to bring a claim for unfair dismissal if they feel they were unfairly selected for redundancy or consider that a genuine redundancy situation did not exist.
Examples of these situations might include where the custom and practice in your workplace has been last in, first out and your selection did not follow this procedure.
Another example may be where the contract of employment sets out criteria for selection which were not followed.
Under the unfair dismissals legislation, selection for redundancy based on certain specific grounds is considered unfair. These include redundancy as the result of an employee’s trade union activity, pregnancy or religious or political opinions.
The employment equality legislation also prohibits selection for redundancy that is based on any of the following 9 grounds:
- Civil status,
- Family status,
- Religious belief,
- Sexual orientation
- Or membership of the Traveller community.
As with any dismissal, an employer must act reasonably when dismissing an employee in a redundancy situation.
This means that the employer must consult with the employee before the decision is made. In addition, you should consider all options including possible alternatives.
If the employer makes a reasonable offer of alternative work, and it is refused, the employee may lose their entitlement to a redundancy payment.
Generally, alternatives which involve a loss of status or worsening of the terms and conditions of your employment would not be considered reasonable. Similarly, the employee may be justified in refusing an offer that involves them travelling an unreasonable distance to work.
The employee may take up an alternative on trial for up to 4 weeks. If the alternative involves a reduction of 50% or more in hours or pay, working under the new arrangements for up to 52 weeks will not count as an acceptance.
If the employee accepts a new contract or re-engagement with immediate effect and the terms do not differ from those of the previous contract, they will not be entitled to claim redundancy. This also applies if they refuse such an offer unreasonably.
If they accept an offer in writing from the employer for a new and different contract which will start within 4 weeks of the previous contract ending, they will not be entitled to claim redundancy. Equally, if they refuse such an offer unreasonably, you will lose your right to a redundancy payment.
A justifiable refusal of an offer of alternative work, followed by dismissal, may, depending on the circumstances, entitle the employee to look for statutory redundancy or make a claim for unfair dismissal.
Any offer of alternative work should be given in writing and the employee is entitled to full information concerning the details of the offer.
An employee is entitled to a minimum of 2 weeks’ written notice of redundancy. This notice period goes up depending on the period of service.
Period of service: Notice required
Between 2-5 years: 2 weeks
Between 5-10 years: 4 weeks
Between 10-15 years: 6 weeks
Over 15 years: 8 weeks
Notice when on lay-off or short time:
If an employee has been laid off or put on short-time work, this means that the contract of employment is temporarily suspended. If the employer then decides to make the employee redundant, you must re-activate your contract in order to dismiss you on grounds of redundancy.
When the employer gives notice of redundancy the employee is entitled to the full notice period. When made redundant the employee is not required to work out their notice, they are entitled to payment in lieu of notice, which is their normal pay for that notice period.
For example, if they have been on short-time work and are then made redundant the payment in lieu of notice is based on the hours of work in the contract of employment, not on the short-time hours of work.
Time off and holidays
If made redundant, the employee is entitled to reasonable paid time off in order to look for a new job.
This right is set down in law in Section 7 of the Redundancy Payments Act 1979. (You should note that while the Redundancy Acts have been amended a number of times the provisions as set down in 1979 for time off still remain.
The employee is entitled to any holidays that are outstanding or payment in lieu of holidays.
Between receiving their notice of redundancy and the date the employment ends, the employee may give notice that they wish to leave before the end of their notice period.
They should do this by completing form RP6 and giving it to you. The employer can decide whether or not to allow the request.
You should note that an employee leaving during the notice period without the employer’s agreement may affect the entitlement to a redundancy payment.