The global recession has prompted many employers to reconsider their workforce to create a more efficient work environment that is also cost effective. In many instances, this includes dismissing employees to streamline company costs. With the increase in redundancies, companies are expected to uphold certain laws that will make the redundancy process fair and equitable for the employee and employer.
redundancy pay
What is Redundancy Law?
Redundancy laws regulate the job dismissal process in England, Wales and Northern Ireland. The laws are basically the same in both locations. These laws ensure that employers treat their employees fairly during the process. Redundancy occurs for numerous reasons that are not always related to employee misconduct. Redundancy may occur because the company no longer has the funds to operate or because the job is no longer required. Redundancy laws protect employers from dismissing a worker for reasons such as age, race, creed or other reasons that are unrelated to job performance. Redundancy law requires that employers must select or dismiss employees for reasons that are fair and acceptable.
Reasons for Acceptable Redundancy
Employers may consult a trade union for redundancy rights and laws. Employers are expected to follow the guidelines set forth by these governing bodies. Common procedures will protect employees who have worked on the job the longest. Long term employees often have the most secure jobs. This process is often referred to as the "last in" and "first out" method. Employees with poor employment records may also be chosen first for redundancy. Some employers may ask for volunteers.
Unfair Redundancy
Employees chosen for redundancy have the right to review the reasons. Employees that suspect unfair treatment may appeal the redundancy decision at an Employment Tribunal or Industrial Tribunal. Unfair redundancy may include personal resentment against a particular worker. The employee may have exposed wrongdoing by the employer and may cause the employee difficulty while on the job. Dismissal on the basis of age, sex or race is also unfair redundancy.
Employees are entitled to consultation and explanation of the reasons for redundancy. This consultation should address why particular workers have been selected and discuss other alternatives to redundancy. Redundancy without consultation is deemed unfair.
Redundancy Pay
Each employee is entitled to redundancy pay if the employee has worked with an employee for a minimum of two years without a break. Both Scotland and the UK adhere to this law. This law also applies to contract workers whose contracts will not be renewed after the second year.
Former employees receive varied amounts of redundancy pay depending upon the length of time employed, the employee's age and the weekly wage the employee received prior to dismissal. Other factors are also considered in special circumstances. Employees receiving redundancy pay should not be taxed on the funds received.
Redundancy Calculator
The redundancy calculator helps employees calculate their expected statutory redundancy payment based upon the requested information. The calculator will require salary amount, length of employment, age and breaks in employment to calculate the payment.
Summary
Keep in mind that redundancy does not have to be a negative occurrence. Many people use the opportunity to travel, start a business or begin a new career. Remain positive as you embark upon your new life.
Aileen Gallagher is a successful business coach and online marketer working with a team of entrepreneurial internet marketers all of whom she coaches on a one to one basis in order to emulate her success.
Redundancy law