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An employee’s rights on redundancy

14 August 2020

As a result of Covid-19, we have seen a number of businesses making their staff redundant. We thought it would be useful to share our checklist of the rights that an employee has in a redundancy situation. These may be statutory or contractual, individual or collective. Some rights will require a qualifying period, others will not.

  • Employees have the right not to be unfairly dismissed (section 94, Employment Rights Act 1996 (ERA 1996)). In practice, this means the right to be warned and consulted in accordance with the Polkey guidelines and the right to be offered suitable alternative employment where possible. However, the right not to be unfairly dismissed only applies to employees who have completed the qualifying period of service of two years.
  • Regardless of an employee's length of service, an employee has the right not to be selected for redundancy on certain prescribed grounds as the dismissal will be automatically unfair (section 105, ERA 1996).
  • In a "collective redundancy situation", all affected employees have the right to be informed and consulted in accordance with section 188 of the Trade Unions and Labour Relations (Consolidation) Act 1992 (TULRCA).
  • All employees with two years' qualifying service have the right to time off to look for work or arrange training (section 52, ERA 1996).
  • All employees dismissed for redundancy have the right to contractual notice, subject to statutory minimum notice (section 86, ERA 1996).
  • Employees with two years' qualifying service have the right to receive a statutory redundancy payment (section 135, ERA 1996).
  • An employee may also be entitled to a contractual redundancy payment, if there is an express or implied right to one.
  • If the employer is insolvent or refuses to pay, the employee has the right to apply to the National Insurance Fund for unpaid "employer's payments", including their statutory redundancy payment and certain sums due under their employment contract.

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