Job Security and Redundancy

Note that this section is intended to give a basic outline of statutory arrangements. The legislation is very complex so advice should always be sought from Amicus to ensure there is no misunderstanding.Eligibility for Statutory Redundancy PayIn the event of no agreed redundancy terms, the following is an outline of the minimum state entitlement.

To qualify a member must:

* have at least 2 years' service, working than 8 hours per week;

* be over 20 years old and under retirement age;

* be dismissed for reasons of redundancy.

Amount of Statutory Redundancy Pay

This depends on age and length of continuous service. For each year of service:

* between 41 and 64 - one and a half week's pay;

* between 22 and 41 - one week's pay;

* between 18 and 22 - half a week's pay.

Note that:

* Statutory Maternity Leave does not count as a break in service.

* If a member is within a year of their 65th birthday statutory redundancy pay is reduced by a twelfth for each complete month since their 64th birthday.

* A maximum of 20 years' service be counted.

* All contractual earnings are included in a week's pay.

* The rate of pay is the rate applying on the date when the statutory minimum notice was required or, when legally adequate notice is not given, the date the job ended.

* If contractual working hours vary or people are working shifts or receiving commission, there are special rates.

The legislation can be complex in many instances. However, there is a £220 limitation on a week's pay (equivalent to £11440 per year) which may mean that for staff on commission or shifts, the complications do not need to be considered. Note that the weekly limit is revised each year usually on 1st April and the last review was in 1998.

Therefore the maximum statutory redundancy pay, which would be payable to people with 20 or more years' service who are between the ages of 61 and 64, would be £6600.

Notice

A member is legally entitled to one week's notice in their first two years with an employer and thereafter a week's notice for each year that they have been with that employer up to a maximum of 12 weeks. An employer can give pay in lieu of notice, provided the contract allows for this. Negotiators are reminded that contractual notice may provide a right to a greater notice period.

Suitable alternative employment

Sometimes an employer will offer alternative employment instead of redundancy to an employee. If it is "suitable alternative employment" and the employee refuses it the employee will forfeit his\her right to statutory redundancy pay. Suitable alternative employment is where the terms and conditions of employment such as hours, status and pay are broadly comparable. Your refusal must be reasonable and this is judged not only on the objective assessment of the terms and conditions but also the more subjective circumstances such as domestic arrangements, mobility and flexibility. If you feel you have not been offered suitable alternative employment or that you wish to refuse it on reasonable grounds you should contact your regional officer for advice. Sometimes trial periods in the new job are offered. If you wish still to qualify for the statutory redundancy pay then you must not go beyond 4 weeks of the trial period.

Consultation

The law obliges an employer to consult, with a view to reaching agreement, any recognised union before making any redundancies if more than 20 people are involved. If they fail to do so sufficiently far in advance of the redundancy exercise then they are obliged to pay for the statutory minimum consultation period. The £220 limit still applies. Note that the consultation period can run concurrently with the notice period. However, before consultation can legally be considered to have begun, the employer must disclose in writing to union representatives:

* the reasons for the redundancies;

* the numbers and description of employees whom it is proposed to make redundant;

* the total number of employees of that description;

* the selection procedure to be used;

* the proposal for how the redundancy dismissals are to be carried out, including the time scale;

* information about the proposed method of calculating the amount of redundancy pay.

The employer must also notify the Secretary of State for Employment and give a copy of this notice to the union. During consultation the employer is obliged to consider and reply to any representations made by the union. Consultation must be a way of:

* avoiding the dismissals;

* reducing the number of employees to be dismissed;

* mitigating the consequences of the dismissals.

The length of consultation required depends on the numbers of staff who are being made redundant:

* 100 or more redundancies requires a minimum of 90 days of consultation;

* 20 to 99 redundancies requires a minimum of 30 days of consultation;

If the employer fails to disclose all or a part of this information then the employer is likely to be in breach of s.188 of the Trade Union and Labour Relations Act 1992 (TULR[C]A). If this is the case the Union can bring a complaint to an Industrial Tribunal. This must be done within three months of the dismissal taking place.

Note: In most organisations where Amicus is recognised, there will be job security agreements that enhance the right to consultation and severance terms.

Further Information

For information the following Department of Employment guides which are free give more detail as a further introduction:

Redundancy Payments

Employee Rights on Insolvency of Employer

Employment Rights on the Transfer of Undertakings

Redundancy Consultation and Notification

Another publication which is worth keeping to hand is the ACAS advisory booklet No 12 "Redundancy Handling".

A comprehensive guide for Amicus members has been produced entitled "Redundancy: Know Your Rights"