Redundancies are unfortunately a fact of life. Business conditions can alter to such an extent that it is no longer viable for your company to keep employing you. As you wonder how on earth you’re going to be able to afford to continue paying for your subscription to ‘What Golf Club?’ or are forced to consider replacing your Chelsea tractor Porsche Cayenne with a 2nd hand Nissan Micra, fear not because we have compiled a beginner’s guide to being made redundant. Assimilate the information carefully, because if your boss has so much as spelt the word ‘redundancy’ wrong on the letter that confirms you’re being made redundant, you could be in for a windfall payment in compensation.
Good luck and feel free to chuck a bean or two our way if you manage to strike gold!
1. Is the position genuinely redundant?
It’s important to remember that it’s the job that is being made redundant – not you. Here at The W1nners’ Club we once tried to get rid of someone under the auspice of being made redundant and the slippery sod had us dragged before an employment tribunal for unfair dismissal. He very nearly bankrupted us because we were told by the tribunal that genuine redundancy only arises when an employee is let go for one of the following reasons:
- The business is closing down.
- The business is no longer operating at the employee’s place of employment.
- There is a reduced need for people in the employee’s category.
NB: We’re not known for our dazzling admin skills here at The W1nner’s Club because if we were, we’d have known how long the employee we tried to make redundant had actually been working with us. As he’d been ruining our lives for just over two years (it felt a damn sight longer), he was entitled to redundancy pay – any less than that and he could’ve been turfed out without so much as a kick up the backside……………………(regretful sigh whilst staring wistfully at the wall planner).
2. The process of redundancy
This is where your boss could be vulnerable. If the process is in any way mishandled, this might provide you with an opportunity to get your bugle out and start tooting the signal to charge at the enemy and proceed with a claim for unfair dismissal.
The common mistakes are as follows:
- Departing from the correct timetable or not following the correct procedure.
- Unfair selection criteria or methods eg. Eeny, meeny, miney, mo! etc.
- Not adequately consulting the people involved (in our case simply making sure that their key card no longer works so that they can’t gain entry into the building anymore).
Tribunals have the power to award up to £78,335 in unfair dismissal cases:
- This amount is based on a calculation of an employee’s present and future loss rather than how many tears you manage to shed in the hearing, so being able to cry on demand is not necessarily required.
The tribunal may order you to be reinstated if you haven’t been treated correctly although this is rare for obvious reasons:
- Boss: “I know I tried to unlawfully bankrupt you the other day, but would you mind working evenings and weekends because we’re a bit snowed under at the moment?”
3. Alternative solutions
An important thing to note is that your boss can’t simply wake up on the wrong side of the bed one morning and decide they’re going to make half the workforce redundant just to teach you all a lesson for missing your targets. They are legally obliged to take reasonable steps to avoid this such as:
- Short time working
- Overtime bans
- Shedding temp. or contract labour
- Early retirement
- Recruitment freeze
4. Who’s for the chop?
The company can select people for redundancy based on wide-ranging criteria as long as they are applied fairly and consistently:
- The ‘last in, first out,’ rule is quite common.
- Selection could be based on skill level, experience or attendance, so all those self-sanctioned duvet days may finally catch up with you.
- Performance may be used as a measurement if an existing appraisal system is in place which is a relief for staff here at The W1nners’ Club because we don’t bother with appraisals.
- Selection cannot be discriminatory eg. based on age, gender or race which is why the black, gay, Scottish, Jewish, amputee, dwarf that supports Leeds United who is in charge of Human Resources here at The W1nners’ Club has been fully briefed to ensure that we remain compliant with the law in this respect.
- If you are pregnant, the company needs to be careful to show that they are not getting rid of you simply because you’re up the duff. This means of course girls that if you sense a bout of inclement economic weather on the way, the best thing to do is grab a guy and get some loving done pronto! Your next pair of Christian Louboutins may depend on it!
5. Voluntary redundancy
- Your employer can only introduce these in genuine redundancy situations or rather, it can’t be used as a way of bungling people out of the back door with a bit of hush money in their back pocket (which is something we’ve had to do on numerous occasions).
- The company must set out the terms of the package, specify who can take voluntary redundancy and must also state that not all volunteers will be accepted to prevent a mass walkout of staff flipping the bird at the boss on their way out.
6. Statutory payments
- Everyone is entitled to statutory redundancy payments except:
- People with less than two years’ service.
- Those that refuse a reasonable offer of alternative employment eg. you’re a finance director who gets offered a job in the canteen washing dishes which in our opinion is perfectly reasonable.
- Employees with owner or shareholder status.
- Service is calculated up to 20 years maximum with 1-5 weeks pay for every year of service.
- A week’s pay is based on actual income but capped at £475 per week, which is an amount that most of our sales team here at The W1nners’ Club wouldn’t get out of bed for if it were tripled – the greedy bastards!
7. Normal payment procedure
Some employers pay a lot more than the statutory minimum for various reasons such as:
- To encourage people to volunteer for redundancy (presumably some people can name their price if it means never having to work with them again).
- Goodwill – although this is a concept that we are yet to fully grasp.
- Provisions written into a contract or the custom of the business.
- Redundancy pay of up to £30,000 is usually tax free.
8. Employee rights
Just because you’re, ‘on the outs,’ it doesn’t mean you automatically relinquish your status as a fully functioning member of the human race. On the contrary, whilst under notice of redundancy, you still have rights besides redundancy pay eg:
- The right to be offered suitable alternative employment.
- The right to reasonable time off for smoking weed job hunting or to arrange training (on full pay of course).
9. Boosting morale
- Whilst the departure of certain staff members will inevitably be met with a sigh of relief by those that remain, it is important that your managers take action to maintain levels of morale. The redundancies need to be handled sensitively and fairly, so no blasting out ‘hit the road jack’ on the internal tannoy system as the person that has been made redundant clears out their desk and gathers their belongings together.