EMP4
REDUNDANCY
Introduction à An eligible employee, dismissed by reason of redundancy, will be entitled, at a minimum, to a
statutory redundancy payment from his employer (ERA 1996, s 163)
à Dependant on reason, this may also give rise to potential wrongful dismissal and/or unfair
dismissal claims Right to claim a redundancy payment is a separate right
à A redundancy payment is in the nature of a reward for past services, and so an eligible
employee is entitled to receive the full payment even when he manages to find another job
immediately
Tribunal - The employer decided that employee will be made redundant, and payment will be given,
without the need for any formal application to the Employment Tribunal
- However, where there is a dispute over the right to receive the payment or over the correct
amount, an application will need to be made and the tribunal will determine these matters
Eligibility - Employees must have two years’ continuous service before they are eligible to claim a
redundancy payment (ERA 1996, s155)
- Must be a dismissal
à See below plan.
Overview - If an eligible employee
- Is dismissed
- By reason of redundancy
- That employee will be entitled to, at a minimum, a statutory redundancy payment (s163, ERA
1996).
- Unless
o His employer offered him a suitable alternative job and
o The employee accepted this this OR
o The employee unreasonably refused this.
Definition The definition of redundancy is contained in s 139(1) of the ERA 1996:
For the purposes of this Act an employee who is dismissed shall be taken to be dismissed by reason of redundancy if the
dismissal is wholly or mainly attributable to—
a. the fact that his employer has ceased or intends to cease—
i. to carry on the business for the purposes of which the employee was employed by him, or
ii. to carry on that business in the place where the employee was so employed, or
b. the fact that the requirements of that business—
i. for employees to carry out work of a particular kind, or
ii. for employees to carry out work of a particular kind in the place where the employee was
employed by the employer, have ceased or diminished or are expected to cease or diminish.
From above definition, it can be inferred that redundancy occurs in 3 main situations:
REDUNDANCY
Introduction à An eligible employee, dismissed by reason of redundancy, will be entitled, at a minimum, to a
statutory redundancy payment from his employer (ERA 1996, s 163)
à Dependant on reason, this may also give rise to potential wrongful dismissal and/or unfair
dismissal claims Right to claim a redundancy payment is a separate right
à A redundancy payment is in the nature of a reward for past services, and so an eligible
employee is entitled to receive the full payment even when he manages to find another job
immediately
Tribunal - The employer decided that employee will be made redundant, and payment will be given,
without the need for any formal application to the Employment Tribunal
- However, where there is a dispute over the right to receive the payment or over the correct
amount, an application will need to be made and the tribunal will determine these matters
Eligibility - Employees must have two years’ continuous service before they are eligible to claim a
redundancy payment (ERA 1996, s155)
- Must be a dismissal
à See below plan.
Overview - If an eligible employee
- Is dismissed
- By reason of redundancy
- That employee will be entitled to, at a minimum, a statutory redundancy payment (s163, ERA
1996).
- Unless
o His employer offered him a suitable alternative job and
o The employee accepted this this OR
o The employee unreasonably refused this.
Definition The definition of redundancy is contained in s 139(1) of the ERA 1996:
For the purposes of this Act an employee who is dismissed shall be taken to be dismissed by reason of redundancy if the
dismissal is wholly or mainly attributable to—
a. the fact that his employer has ceased or intends to cease—
i. to carry on the business for the purposes of which the employee was employed by him, or
ii. to carry on that business in the place where the employee was so employed, or
b. the fact that the requirements of that business—
i. for employees to carry out work of a particular kind, or
ii. for employees to carry out work of a particular kind in the place where the employee was
employed by the employer, have ceased or diminished or are expected to cease or diminish.
From above definition, it can be inferred that redundancy occurs in 3 main situations:
