Redundancy is a potentially fair reason for dismissal. To satisfy the definition of redundancy, the dismissal must be related to the fact that:
- Your employer is ceasing to carry on its business or it is ceasing to carry it
on in your place of work; or
- The requirements of the business to carry out the duties which you
performed have reduced or have ceased.
If you have been continuously employed for two or more years and you are made redundant, you will be entitled to a statutory redundancy payment of a multiple depending on your age of up to £508 for each year of employment to a maximum of 20 years. Some employers may have contractual policies which provide redundancy payments over and above the statutory amount.
Where you are made redundant but are offered suitable alternative employment, you may lose your right to a redundancy payment if you unreasonably refuse that offer. For the alternative employment to be deemed ‘suitable’, it would normally need to be at the same or similar level of salary and benefits, status and responsibility. You would also have to be given at least a four week statutory trial period, during which time, you may decide (if reasonable) that you do not wish to continue in that employment, to leave and to accept the redundancy payment. Please note that the new ACAS Code of Practice does not apply to redundancy situations.