18 Mar Redundancy In Spotlight As Duke And Duchess Of Sussex Axe All 15 Staff.
But how precisely does redundancy differ from dismissal? As an employer of domestic and household staff, the differences are important as not following procedures can result in an employment tribunal case.
The following will be helpful if you find yourself in a position when you need to let staff go.
Dismissal is when you dismiss a member or members of staff for any reason other than that their job no longer exists: for instance theft, or an act which contravenes their contract of employment.
Redundancy is when you dismiss an employee or employees because you no longer need anyone to do their job. This might be because:
- You are changing what you do.
- You are doing things in a different way.
- Moving home and or not needing staff in the future.
For a redundancy to be genuine, you must demonstrate that the job or jobs of employees will no longer exist.
You must treat those given redundancy notice fairly and act in accordance with their contract and legal redundancy rights. That includes making sure you consult with them, follow the right selection process if others are being made redundant (and do not discriminate on the basis of age or gender for example) and give proper notice period. If not, then you could face a claim for unfair dismissal, or compensation for lack of consultation.
Employees have certain rights and may be entitled to redundancy pay if they’re made redundant.
Redundancy payments are based on age, weekly pay and number of years in the job.
Staff only qualify for statutory redundancy pay if they worked for you for at least 2 years. Redundancy pay for each full year of employment from year three onwards is calculated as follows:
Redundancy pay is based on gross earnings.
For each full year worked for you.
- age 18 to 22 – half a week’s pay
- age 22 to 40 – 1 week’s pay
- age 41 and older – 1.5 weeks’ pay
If the employee turned 22 or 41 while working for you the higher rates only apply for the full years they were over 22 or 41.
There are some limits to how much redundancy pay can be claimed.
- the maximum weekly amount is £525 .
- Redundancy pay is only paid for a maximum of 20 years’ work.
Employees can try out an alternative role with their employers for 4 weeks (or more if agreed in writing) without giving up their right to redundancy pay.
All employees under notice of redundancy have the right to reasonable time off to look for a new job or arrange training.
You are best advised to seek an appropriate professional in this field for advice before making decisions.
The Graham Agency, keeping you informed.