Redundancy is a pressing issue for many in today’s uncertain economic climate. With the threat of being made redundant hanging over many, it’s important to be aware of your legal rights and the obligations your employer has towards you.

Prior to making any redundancies, employers must first consult with their employees. For companies making fewer than twenty redundancies, there is a requirement to consult each affected employee individually.  The time limits with respect to this are not prescribed, but must be reasonable.  If between twenty and ninety nine redundancies are contemplated, a collective consultation lasting thirty days must take place and for over 100 redundancies, a ninety day collective consultation period is required.

If you are being made redundant, you should be provided in writing with details about:

•    The reason for the redundancies.
•    The number of people involved.
•    How affected individuals will be chosen.

There is no set selection process which the employer must follow, although the process must be fair and based on evidence rather than personal whims.

If you are selected for redundancy, your employer must meet with you individually to explain why. They must also have considered whether there is any workable alternative to redundancy. If you feel you have been selected unfairly or that alternatives were not considered, you can appeal the decision and, if necessary, take your case to an employment tribunal.

If you have worked for your employer continually for more than two years you will be entitled to statutory redundancy pay. Your entitlement varies from half a week’s pay per year of service to one and a half week’s pay, depending on your age. The minimum weekly pay rate is £350, but your firm may set a higher rate.

You are also entitled to work your full notice period as set down in your contract, although your employer can pay you in lieu.

Many employers now enter into compromise agreements with redundant staff. These agreements lay out the terms and conditions of the termination of employment, and signing one means that you cannot make any claims against your employer in future, except for personal injury, pension issues or claims to enforce the terms of the Compromise Agreement.

Companies often provide an enhanced redundancy package for those who sign such an agreement. Obtaining independent legal advice at this point is essential to ensure that the full implications of the agreement are understood.

Although they may sound quite daunting, with professional legal advice compromise agreements can be mutually beneficial to both parties.

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