Managing redundancies can be challenging, but understanding your statutory obligations is crucial to ensuring a fair and compliant process. Here’s a comprehensive guide to help you navigate your responsibilities during redundancy in the UK.

Statutory Redundancy Pay

For employees with more than 2 years of continuous service, you are required to provide statutory redundancy pay. The calculation is based on the employee’s length of service and age:

• Under 22: 0.5 week’s pay for each full year
• 22 to 40: 1 week’s pay for each full year
• 41 and over: 1.5 week’s pay for each full year

The maximum number of years to be taken into account is 20. If your employment contracts specify additional redundancy pay above the statutory minimum, you must adhere to the contractual amount.

Payment in Lieu of Notice

If you decide not to require an employee to work their notice period, you must provide payment in lieu of notice. The statutory notice periods are:

• 1 week’s notice for employment between 1 month and 2 years
• 1 week’s notice for each year if employed between 2 and 12 years
• 12 weeks’ notice if employed for 12 years or more

Notice Period

Ensure you provide a minimum notice period based on the employee's length of service, as outlined above.

Consultation

You are obligated to consult with employees before making redundancies. The type of consultation required depends on the number of redundancies planned:

• Individual Consultation: Required if fewer than 20 redundancies are planned.
• Collective Consultation: Required if 20 or more redundancies are planned within 90 days at a single establishment. This consultation must start at least 30 days before the first redundancy for 20-99 redundancies, and 45 days before for 100 or more redundancies.

Alternative Employment

Consider offering suitable alternative employment within your organization. Employees have the right to a 4-week trial period in any alternative job offered.

Time Off to Look for Work or Arrange Training

Employees given notice of redundancy with two years of continuous employment are entitled to reasonable time off to look for another job or arrange training. Ensure you accommodate this statutory right.

Redundancy During Maternity, Paternity, Adoption, or Shared Parental Leave

Employees on maternity, paternity, adoption, or shared parental leave have additional protections. You must offer any suitable alternative vacancies with priority over other employees, ensuring they receive the same redundancy rights and pay.

Appeal Process

Employees have the right to appeal against redundancy decisions. Make sure your redundancy policy clearly outlines the appeal process and that you handle appeals fairly and transparently.

Statutory Sick Pay

Employees on sick leave who are made redundant are still entitled to statutory sick pay (SSP). Ensure you continue to meet this obligation.

Compensation for Unfair Dismissal

Employees with over 2 years of continuous service can claim compensation for unfair dismissal if the redundancy process was not fair or properly followed. It’s essential to adhere strictly to statutory requirements and fair procedures to mitigate this risk.

By understanding and fulfilling these obligations, you ensure a fair redundancy process that complies with UK law. This not only protects your organization from potential legal issues but also demonstrates a commitment to treating employees with respect and fairness during difficult times.