To make staff redundant, there is a process that must be adhered to. A part of this is ensuring affected employees are given proper notice.
In addition to a specific notice period, those workers provisionally selected for redundancy are also entitled to other rights, including:
- redundancy pay
- a consultation with your employer
- the option to move into a different job
- time off to find a new job
Notice of redundancy
Under statutory redundancy notice rules, an employer must give an employee the notice in their contract of employment, or the statutory minimum which is:
- at least one week if the person has been employed for between one month and 2 years
- one week for each year served, between 2 and 12 years
- 12 weeks if employed for 12 years or more
You can provide more than the statutory minimum period, but not less. It is also important to check an employee’s contract in case it includes provision for a notice period longer than the statutory minimum.
Payment in lieu of notice
It is possible to terminate employment without notice if an employee’s contract provides for a payment in lieu of notice and the employer is able to pay.
‘Payment in lieu’ means paying the employee all of the basic pay they would have received had they worked for the duration of their notice period. This may include extras, such as pension payments. Check the terms of their contract or take legal advice to be sure you are paying the correct amount.
If you decide to offer an employee payment in lieu, you still need to make any redundancy payment to which the employee is entitled.
You can offer payment in lieu of notice even if it is not provided for in an employment contract. However, the employee does not have to accept.
If there is no payment in lieu, or the employee decides not to accept payment in lieu, the employer must continue to pay them until their employment ends.
When does the notice period start?
The redundancy notice period is the time between an employee being informed of the termination of their employment due to redundancy selection and their last working day.
Be aware: an employment contract may stipulate that the notice period commences on the working day after the employee has been formally notified.
If the employee has been notified by post, they will need to be allowed time for the letter to arrive and be read. For example, if the letter is sent by mail on a Monday and it arrives on Wednesday, the notice period may not start until Thursday.
As the employer, it is also your duty to make sure that the letter has been received, read, and fully understood by the recipient.
Redundancy and the COVID-19 pandemic
In March 2020 the Government announced the Coronavirus Job Retention Scheme. Its aim has been to help businesses deal with the economic consequences of the Coronavirus (COVID-19) pandemic by allowing them to place employees on furlough.
Despite this, the usual rules for redundancy continue to apply. Employers can still make furloughed employees redundant, although some additional clarity may still be needed.
For example, if a furloughed employee is given notice of redundancy, they should probably be paid their full salary during the notice period, even if they have only been receiving the relevant percentage of furlough pay.
With the economy facing an unprecedented period of uncertainty, employers must ensure that their redundancy policies and practices are in line with the law and any developing guidelines issued by the Government. If you are in any doubt, or would like to know more, please get in touch.