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Redundancy Payment Solicitors – Employment Compensation Claims

SOLICITORS HELPLINE: ☎ 0345 515 0655


In the majority of cases, termination as a result of redundancy is fair however that is not always the case. A redundancy termination could be regarded as unlawful for various reasons. The principal legislation governing redundancy is the Employment Rights Act 1996 which determines the validity of a redundancy dismissal. If you require legal advice from a redundancy solicitor, without further obligation, just call the helpline or complete the contact form or email our solicitors offices.

Redundancy Payment Calculation

The amount of the redundancy payment is arrived at by performing a detailed calculation based on statutory guidelines. The employee has the right to dispute the amount offered by appealing to the Employment Tribunal. In general terms the amount of payment to be made depends on the applicant’s age and the amount of time during which they were employed by the organisation. Employers must provide a written statement showing detailed calculations and any dispute can be referred to an Employment Tribunal within 6 months. The amount of the redundancy payment depends on the age of the applicant and the length of service however there is a cap on these payments. Compensation payments are calculated as follows :-

  • one and a half week's pay for each year that the employee was over 41
  • one week's pay for each year that the employee was over 22, but under 41
  • half a week's pay for each year that the employee was over 18, but under 22
  • the maximum number of years which may be counted is 20

Statutory caps limit the amount of money an applicant can receive as a redundancy payment. The law places a cap on the maximum amount of weekly pay that can be used in the calculations, regardless of whether the applicant’s actual weekly pay is higher. In the case of an applicant whose weekly pay is below the cap, the actual amount of pay received is used.

Two basic criteria are essential in qualifying a worker for a redundancy payment. First, the worker is by necessity a direct employee and the individual cannot be self-employed or a for-hire contractor. Secondly, the worker must have been consecutively employed for at least two years.

Redundancy or Unfair Dismissal

One circumstance in which is not easy to challenge the alleged redundancy as an unfair dismissal is when an organisation is in liquidation, administration or receivership whereupon redundancy for some workers is almost always required. The second circumstance which could allow for uncertainty regarding the legitimacy of the employer's claim to redundancy is a decrease in numbers needed to do a specific job, which could allegedly have come about from a shift in an organisation's methods or an upgrade to technology.

To qualify for redundancy, the employees dismissal has to meet one of two conditions. One condition is a diminished necessity for workers with a particular skill set, due to changes in technology. The other is when the entire operation is to close down.

A few employers attempt to benefit from this redundancy concept to get around or cover up another type of dismissal that may be more expensive for the employer. The employer might use redundancy as justification to dismiss a worker unfairly. When a dismissed worker thinks they have been dismissed by the use of a false redundancy pretext, that worker should seek independent advice from a redundancy solicitor.

    Unfair Dismissal

    When an employer does not want to pay the higher compensation afforded to an unfair dismissal, but may want to release an employee; the employer may resort to a sham redundancy which is usually the most inexpensive method of dismissal. When you have doubts about the validity of your employer's claim of redundancy, it is important to get the advice of an employment law solicitor who can apply to the Employment Tribunal for resolution.

    Fair Dismissal

    In deciding whether or not an employer has acted fairly the Employment Tribunal must consider the following :-

    • whether the employee or any applicable Trade Union has been given reasonable and adequate notice
    • whether fair selection criteria have been applied
    • whether adequate consideration has been given to the employees personal work record.
    • whether the employer has given adequate consideration to alternative employment that may be available within the organisation

Alternative Employment

If an employee is offered suitable alternative employment within the organisation and refuses the alternative job then no claim can be made by the employee however an employee can refuse the alternative job if the refusal is reasonable after taking into account his personal circumstances and needs. If the employee decides to take an alternative job that is offered within the same organisation then the law allows a trial period of 4 weeks in the new job for assessment and the subsequent right to re-instate his previous claim if the new job is unsuitable.

Employment Rights Act 1996

The termination of employment by way of redundancy is potentially a fair dismissal however whether or not an employee has actually been unfairly dismissed rather than made redundant will be dependent on the facts of each case. The Employment Rights Act 1996 requires the Employment Tribunal to consider whether or not the employer acted reasonably and fairly in dismissing the employee, taking into account the size and administrative resources of the employers business.

Settlement Agreement

When in the course of termination an employer offers a "settlement agreement", the worker must receive qualified advice from an independent person who is often a solicitor or a trade union official. The person providing advice must be insured against indemnity and must counter-sign the agreement.

Most settlement agreements are above board and offer the worker a better compensation package than would be available from statutory provisions or from the Employment Tribunal however it is always wise to have an experienced solicitor pour through the legal jargon and provide you with an understanding of the documents benefits, as well as its disadvantages prior to signing. There is often lot more at stake than just wages or compensation and the agreement may contain clauses about references, confidentiality, restrictive covenants etc.

Redundancy Payment Solicitors

Our employment solicitors are very experienced in handling employment disputes involving redundancy. We will give you a detailed summary of your rights and explain the calculation process, as well as provide you an estimate of the compensation due to you. Our redundancy solicitors can negotiate the terms of the settlement with your employer on your behalf. In the event that your employer refuses to negotiate or provide adequate compensation, we can make application for resolution to the Employment Tribunal.

SOLICITORS HELPLINE: ☎ 0345 515 0655