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Generally speaking, a redundancy situation arises if a business closes completely, a particular workplace closes or there is a reduced need for employees to do a particular type of work.
If an employer is considering making employees redundant, they should firstly explain the situation to all affected employees and warn their jobs are at risk of redundancy. The employer should then consult with the employees on potential ways to avoid redundancy and if more than one person is affected it may involve selecting the redundant employee(s) from a pool based on objective criteria.
Once redundancy is confirmed, the employer should allow reasonable paid time off for the employee to find another job and give them the right of appeal against the decision.
Depending on the number of redundancies to be made within a particular timeframe, there may also be statutory minimum consultation periods which apply before any decision can be made.
Aside from a fair consultation and the ability to appeal the decision which should form part of a redundancy process as outlined above, employees have a number of financial entitlements.
If they have been employed by the business for at least two years, they are entitled to receive a statutory redundancy payment which is calculated based on their age and length of service as follows:
Length of service is capped at 20 years for redundancy purposes and there is also a statutory cap on weekly pay which is reviewed each year and is currently £525 (as at April 2019).
In addition, employees also entitled to a period of statutory or contractual notice, or payment in lieu of notice, as well as accrued untaken holiday entitlement.