The Law of Redundancy - Essay Example

? The Law of Redundancy  The Law of Redundancy  Redundancy essentially refers to a form of dismissal, which takes place when employers desire to decrease their workforce levels. Employees who are made redundant are typically eligible for a number of rights, which include, among others, a notice period, the opportunity to relocate to another job, reasonable consultation with the employer, time off to seek a new job and redundancy pay. Employers must select employees for redundancy in an objective and fair manner, for instance, on the basis of employees’ capacities to perform job tasks or levels of professional experience (Cascio 2002, p. 83). However, it is illegal for employers to select employees for redundancy on the basis of their gender, age, disability or being pregnant. Redundancy on the basis of gender, age and the other elements is classifiable as unfair dismissal. Employers use a number of fair and objective ways to select employees for redundancy, which include last in, first out basis, use of disciplinary records, and self-selection by asking for volunteers and markings of staff appraisal, for instance, experience, qualifications and skills. In addition, employees are allowed to select employees for redundancy if the employees’ jobs no longer exist. In such an instance, the employer can make employees redundant without necessarily following the selection process (Curtis & McMullen 1997, p. 154). When an employee is dismissed from work by reason of redundancy, the employee is legally entitled to a statutory payment for redundancy from the employer. If the employer (Wolsey Engineering Ltd) fails to pay, the employee can claim the statutory redundancy payment through an Employment Tribunal (Duggan 2012, p. 67). The entire redundancy process should be impartial, consisting of, among others, consultation, redundancy payment and notice periods. With regard to redundancy pay, employees who have been working for the dismissing employer for at least two years are subject to receive redundancy payment (Hall & Edwards 1999, p. 307). Employees typically get half of their week’s pay for each year they were below 22 years, one week’s pay for every year they were older than 22, but below the age of 41 years and one and half week’s pay for every year the employee worked while at least 41 years old. Notice periods are crucial to ensure dismissal legality. Notice periods are given prior to the termination of employment. Employment laws require employers to give a notice period of at least one week for those employed between one month and two years, one week’s notice for each year if the employee worked between two and 12 years and 12 weeks’ notice for those employed for 12 years or more (Income Data Service (IDS) 2008, p. 57). In addition to statutory payment for redundancy employers should pay a notice payment by either paying the redundant employees through their notice periods or pay in lieu of notice. In the latter instance, notice payments must be equal to the to the employees’ basic pay plus whatever amount they would have earned during the notice period (Marsh & Soulsby 2002, p. 74). Employees made redundant are entitled to appropriate periods of consultation with the employer. Such consultation includes speaking to employees regarding the reasons for their redundancy and available alternatives to redundancy (McMullen 2011, p. 91). Employees are permissible to claim to an employment tribunal if the employer fails to consult effectively, for instance, if the employers starts late or fails to consult altogether. Collective redundancies of at least 20 employees require consultation between the employer and an employee representative. There is no definite limit to the length of consultation although minimum lengths are in place for more than 20 redundancies (Mellahi & Wilkinson 2004, p. 251). In essence, in order to ascertain legality, the employer should consider plausible alternative employment for all employees prior to declaring the redundant, and when applicable offer such employment to these employees or at least the chance to apply for alternative jobs. The employer must offer the alternative job as soon as possible (Morris 1991, p. 83). When the employer considers a certain employee as suitable for alternative employment, the employer is legally permissible to offer such an employee alternative employment. Such an opportunity must, however, be provided on an impartial basis without prejudice towards or against certain employees (Redman & Wilkinson 2006, p. 362). The suitability of an alternative job to a redundant employee centres on similarity between the alternative and current job, the terms of employment offered, the employee’s skills, capacities and circumstances relating to the job and the pay, location and status or the alternative job. In the event that the employer has a suitable alternative employment and fails to offer it to the redundant employee, the latter’s redundancy could be tantamount to unfair dismissal. However, when the employer offers an employee suitable alternative employment and the employee turns down the offer, the employee may lose his or her eligibility to statutory redundancy payment. Therefore, if Chris turns down the offer of suitable alternative employment, he would forfeit his right to statutory redundancy pay. However, the redundant employee can claim to an employment tribunal is he or she considers the job as an unsuitable alternative (Sahdev 2003, p. 61). The initial month of the new job is considered as a trial, and in the event that the employee leaves in the course of this period, he or she is still legally eligible to claim redundancy payments. However, this is only the case if the employee’s refusal of the job is reasonable. If an employee (such as Chris) agrees to stay on the job for more than a month or if he or she unreasonably rejects the job within the first four weeks, the employee relinquishes his or her right to demand redundancy payment. Conversely, employees such as who are not offered alternative employment must be provided time off to hunt for jobs (Tyler & Wilkinson 2007, p. 542). However, this is only applicable to employees who have been continuously employed for at least two years by the culmination of the notice period. Therefore, Adam must be given time off to hunt for a job or the employer should arrange sufficient training to help Adam find another job. Regardless of the time off afforded to employees, the employer is only legally bound to pay the employees up to two-fifths of their weekly pay. The final aspect of the redundancy process is payment or redundancy entitlements, which centres on the employee’s age, average pay per week and length of employment. For instance, redundancy payment for employees older than 41 years (for instance, Brenda and Adam) encompasses the multiplication of the employee’s weekly way for every year of employment by 1.5 (Wilkinson 2004, p. 578). References Cascio, FW 2002, ‘Strategies for responsible restructuring’, Academy of Management Executive, vol.16, pp. 80–91. Curtis, S & McMullen, J 1997, Redundancy: the law and practice, Sweet & Maxwell Publishing, London. Duggan, M 2012, Business reorganisations and employment law: reorganisations, redundancies and transfers, 2nd edn, Jordan Publishing, Bristol. Hall, M & Edwards, P 1999, ‘Reforming the statutory redundancy consultation procedure’, Industrial Law Journal, vol. 28 no. 4, pp. 299-318. Income Data Service (IDS) 2008, Redundancy: IDS employment law handbook, Incomes Data Services Limited, London. Marsh, SB & Soulsby, J 2002, Business law: business law series, Nelson Thornes Publisher, Cheltenham. McMullen, J 2011, Redundancy: The Law and Practice, 3rd edn, OUP Oxford, Oxford. Mellahi, K & Wilkinson, A 2004, Downsizing and innovation output: A review of literature and research propositions, BAM Paper 2004, British Academy of Management. Morris, S 1991, Handling redundancy (employment law guides), Nicholas Brealey Publishing, London. Redman, T & Wilkinson, A 2006, ‘Downsizing’, in T Redman & A Wilkinson(eds), Contemporary human resource management, FT/Prentice Hall, London. Sahdev, K 2003, ‘Survivors’ reactions to downsizing: The importance’, Human Resource Management Journal, Vol.13, no.4, pp. 56–74. Tyler, M & Wilkinson, A 2007, ‘The tyranny of corporate slenderness: Understanding organizations anorexically, Work, Employment and Society, vol. 21, pp. 537-549. Wilkinson, A 2004, ‘Downsizing, rightsizing and dumb sizing: quality, human resources and sustainability’, Total Quality Management, vol. 15, no. 8, pp. 574-96. Read More