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Redundancy Notes

LPC Law Notes > Employment Law Notes

This is an extract of our Redundancy document, which we sell as part of our Employment Law Notes collection written by the top tier of University Of Law students.

The following is a more accessble plain text extract of the PDF sample above, taken from our Employment Law Notes. Due to the challenges of extracting text from PDFs, it will have odd formatting:

REDUNDANCY

REDUNDANCY PAYMENTSEligibility (burden of proof on employee)
* within time limit (6 months [-1day] from termination)
* at least 2 years' service (continuous)
* not excluded classDismissal
* actual
* constructive
* non-renewal at end of fixed-term contractRedundancy
* job redundancy (entire business closed)
* employee redundancy (position closed)
* place of work redundancy (where did they work)
* did the redundancy situation cause the dismissal?
* was previous/alternative job offered back?
* was the offer unreasonably refused or terminated?Payment Calculation
* age factor x final week's gross pay (below stat min) x number of full years

continuous serviceOther Claims
* consider possibility of unfair/wrongful dismissal claims

STATE THE CLAIM BEING MADE - REDUNDANCY An eligible employee, dismissed by reason of redundancy, will be entitled, at a minimum, to a statutory redundancy payment by his employer (ERA 1996, s 163). Claimant must be an employee, have been dismissed, have the requisite period of continuous employment and not be within an excluded class.

IS THE CLAIMANT ELIGIBLE FOR A REDUNDANCY PAYMENT?
(BURDEN OF PROOF ON CLAIMANT) TIME LIMITSMust be within time limits - 6 months (less 1 day) from EDT (effective date of Termination)

MUST BE AN 'EMPLOYEE'??

An individual who works under a contract of employment (s.230(1)) Not self-employed workers Two years continuous employment at the date of termination (s.108) The effective date of termination is calculated in the same way as for unfair dismissal (s.145)
- Notice periods apply to the calculation of the time served (s.97) e.g. Mary commenced work just under 2 years ago and is just one week short of having two years service - her contract provides that she must be given two weeks' notice
- Part-time staff have equal rights with full-time
- There are no age limits Minority of cases:
- Mariners
- Domestic servant & a relative of the employer

HAVE THE REQUISITE PERIOD OF CONTINUOUS EMPLOYMENT PRIOR TO DISMISSALNOT BE FROM AN EXCLUDED CLASS PRECEDENT??

[NAME] is an employee as they have an employment contract (s.230(1)). They have the requisite period of continuous employment as [NAME]
commenced work [YEARS] ago.
[NAME] is not part of an excluded class.
[NAME]' employment was terminated on [DATE] therefore [he/she] would have to bring claim within 6 months (less one day) by midnight [DATE].'

HAS THE EMPLOYEE BEEN DISMISSED?
? ACTUAL DISMISSAL On the facts, [EMPLOYEE] was [DIMISSAL] therefore he has been actually dismissed without notice.

Have been dismiss ed (s.136( 1))TERMINATION OF A FIXED TERM CONTRACTEXPIRY OF THE CONTRACT UPON COMPLETION OF THE TASK

? CONSTRUCTIVE DISMISSAL -( resigns due to employer repudiatory breach) 'On the facts, [EMPLOYER] has...
(check any clauses for guidance on whether it could be argued that the reason is ok)???

Reduction in salary (express term of contract Change in job description (helpline worker now not a trainer, differences in the jobs i.e. no more face-to-face customer contact) Change of contractual hours (does contract permit this) (Temp change not perm) (unsocial hours - 7pm finish) Removal of a bonus Transferring power to another on a permanent basis when employee is away is a breach of the implied term of trust and confidence Not receiving a pay rise when all his colleagues have - breach of the implied duty of trust and confidence

This is a repudiatory (not minor) breach of [express or implied] terms of the contract which will entitle [EMPLOYEE] to resign (without or without notice) and discharge the contract for constructive dismissal (Western Excavating).
[EMPLOYEE] has a good chance despite it being difficult to prove. [EMPLOYEE]
[DID/MUST] resign within a reasonable time of the breach [DATE EXAMPLE].
? Minor breaches wont justify a resignation unless 'last straw', which is the last of many minor breaches, resignation may be justified as employers conduct is looked at as a whole (Abbey National v Robinson)

(A) IS THERE A REDUNDANCY SITUATION? (ERA 1996, S.139) DEFINITIO N

'JOB REDUNDA NCY'

'PLACE OF WORK' REDUNDA NCY??

Look at the actual situation rather than what the contract says S.139(1) ERA o Where the business ceases to operate o Where the business ceases to operate in the place where the employee is employed o Where the employer no longer needs as many employees Where the business ceases to operate (s.139(1)(a)(i)) The employees are automatically entitled to a redundancy payment Temporary cessation of business is a redundancy situation

'First we must look if there is a redundancy situation. Under s.139(1)(a)(i) an employee who is dismissed by reason of the closure of the employer's business will be dismissed by reason of redundancy. On the facts, [EMPLOYER] is ceasing to operate [temporarily] therefore [EMPLOYEE] is being dismissed by reason of job redundancy'.Where the business ceases to operate in the place where the employee was employed (s.139(1)(a)(ii))
- i.e. where the employee actually work (factual test) or could be required to work (contractual test)

'First we must look if there is a redundancy situation. Under s.139(1)(a)(ii) a dismissal is considered redundancy where the business ceases to operate in the place where the employee was employed. On the facts, [EMPLOYER] is moving the business to [LOCATION/DISTANCE] in order to [REASON] therefore [EMPLOYEE] is being dismissed by reason of work place redundancy'.Where the employer no longer needs as many employees (s.139(1)(b))

1. Initial overstaffing
? Even though the same amount of work is being done
? Fellow employees can absorb the work done by the dismissed employee

2. Implementation of new technology

3. Re-organisation of work methods may produce a more efficient system requiring less employees

4. Taking on an independent contractor to do the same work

5. Work carried out by an employee may be done in fewer hours so the employer seeks to reduce hours

'EMPLOYE E' REDUNDA NCY

WORK OF A PARTICULAR KIND
? If the nature of the work has changed fundamentally so that work of a particular kind has ceased or diminished, even though it has been replaced by different work = still redundancy (e.g. plumber replaced with a heating technician due to implementing new heating system (Murphy v Epsom College)
? If an employee is replaced because they are too slow and the employer cannot afford them = NOT redundancy as doesn't come under work of a particular kind as the work hasn't ceases or diminished

In Safeway Stores v Burrell [1997], the EAT held a 3-stage process to see whether a redundancy situation under s.139(1)(b) existed. I. Was the employee dismissed?
If so, II. Had the requirements of the employer's business for employees to carry out work of a particular kind ceased or diminished, or were they expected to cease or diminish? (applicants contract irrelevant) If so, III. Was the dismissal of the employee caused wholly or mainly by that state of affairs?
'First we must look if there is a redundancy situation. Under s.139(1)(b) ERA 1996 an employee is dismissed by reason of redundancy if the reason for his dismissal is that the requirement for employees to do work of a particular kind has ceased or diminished. On the facts, [EMPLOYEE] was dismissed because [EMPLOYER] has
[CHOOSE REASON 1-5 ABOVE] therefore work of a particular kind [JOB] has ceased/diminished; and the dismissal was caused wholly because of this reason (employee redundancy) (Safeway Stores v Burrell)'

(B) TWO PART TEST FOR EMPLOYEE REDUNDANCY AND PLACE OF WORK EMPLOYEE REDUNDANCY

DID THE REDUND ANCY SITUATI ON CAUSE THE DISMISS AL OF THIS EMPLOY EE?

'Secondly, we must consider whether the redundancy situation caused the dismissal of this employee. Bumping occurs when employee A's job disappears then employee A is This occurs when employee A's job disappears. Employee A is then transferred to a new workplace and employee B is dismissed. On the facts, [EMPLOYEE to a [DEPARTMENT new workplace and employee B is [HE/SHE]
dismissed.has been moved KEPT ON]'stransferred job has ceased GOING]
therefore BUMPI to [REDUNDANT and
[REDUNDANT EMPLOYEE]
been
? In EMPLOYEE]'s W Gimber & role Sons Ltd v Spurret (1967), it was has held that'bumped' the NG
[OUT/INTO ANOTHER ROLE]
by reason redundancy ((W Gimber Ltd v dismissal of B was by wayofof redundancy since work &
of Sons a particular Spurrett).' kind, i.e. A's work had ceased.
? 'Angelica has been moved into Jeff's role therefore Jeff has been PLACE OF WORK REDUNDANCY bumped out into a help-desk role' (Safeway v Burrell) Mobility clauses In Bass Leisure Ltd v Thomas [1994] this was held to be factual, AND High Table Ltd v Horst [1997] (CofA); o If an employee has worked in only one location, that is their place of work-regardless of any mobility clause in their contract. o If an employee has worked from several locations, the place of work is still to be established by a factual enquiry, taking into account any contractual terms that might assist in evidencing their place of work, for example a mobility clause. E.g. if they asked to work in a different location and refuse then it is possible that they may be dismissed for reasons of conduct (Home office v Evans) not redundancy'Secondly, we must consider whether the redundancy situation caused the dismissal of this employee. If there is a mobility clause within an employee's contract and the employee is offered alternative employment then they may not automatically qualify for a redundancy payment. [EMPLOYEE]'s contract contains a mobility clause therefore
[HIS/HER] failure to move was a breach of contract (misconduct) which lead to her dismissal (Bass Leisure Ltd v Thomas) not redundancy'.

DID THE EMPLOYER OFFER SUITABLE ALTERNATIVE JOB/OLD JOB BACK?
IF NO employee entitled to redundancy payment - (see below) Offers of employme nt s 141(2)-(4)

Before the ending of the old contract, he must be offered a new contract and must start within 4 weeks of the old contract which appears to have been [met/not met].Offer of re-employment must be made by the original employer or an associated

??PRESUMP TION OF REDUNDA NCY?

employer Offer must be made before the employee's contract of employment comes to an end Offer must relate to the re-employment of the employee in either the same job or in a suitable alternative job Reemployment must take effect within four weeks of the end of the original contract
-> employees who unreasonably refuse the offer will lose right to redundancy payment Employee can make a claim to employment tribunal where employer refuses to make redundancy payment Employer has burden of proving dismissal is not due to redundancy but due to conduct if employee makes a claim s 163(2) ERA 1996 Suitability = differences between old and new 'Under s.141(2)-(4) an employee is not entitled to a redundancy payment if he unreasonably refuses an offer by his employer to re-employ him (in the same job or a suitable alternative) before his contract comes to an end. The renewal or re-engagement must take effect within four weeks of the end of his employment. On the facts, [EMPLOYEE] has been offered
[JOB] before his current contract comes to an end. Objectively this is
[LIKELY/UNLIKELY] to be suitable as...
SUITABIL ITY

OFFERS OF REEMPLOYM ENT (s.141 ERA)

the only major difference is [DIFFERENCE] therefore offer is likely to be considered by a Tribunal as a suitable alternative. An objective test that compares;
? The old/new job
? The old/new contract
? Hours - night shit now/evening work - but paid more?
? Rates of pay - same as old job/higher? Still based on productivity?
? Nature of Duties - duties the same/more - but paid more?
? Seniority - same status?
? Availability of training (if required)
? Bonus pay for move and inconvenience

1. DID THE EMPLOYEE ACCEPT THE NEW JOB, EVEN IF NOT SUITABLE?
If NO ? Employee entitled to redundancy payment - go to calculate payment If the employee accepts an offer of a new job by the employer despite it ACCEPTA not being suitable, then the employee is treated as having not been dismissed. On the Facts, [EMPLOYEE] accepted the job offer of NCE OF
[OFFER] despite the fact [HE/SHE] will struggle to [PROBLEM]
THE therefore [HIS/HER] continuity of employment will be unbroken and OFFER
[HE/SHE] will not be entitled to a redundancy payment (s.141 ERA 1996).

2. DID THE EMPLOYEE UNREASONABLY REFUSE THE OFFER OR UNREASONABLY TERMINATE DURING THE TRIAL PERIOD?
If the employee rejects an offer to re-new or re-engage the question of whether or not he is entitled to a redundancy payment turns on whether the offer was a suitable alternative and whether it was REJECTIO reasonable for him to refuse it (s.141). On the facts, the [EMPLOYER]'s N OF THE offer was arguably suitable for reasons discussed above. To decide OFFER whether the offer was reasonably refused we must consider a subjective test of the employee's personal circumstances. [EMPLOYEE]
will be effected by...
? The effect of the disruption - stressful person
? Moving accommodation
? Shift patterns
? Accessibility of the place of work - distance/currently walks to work/5 min drive-1 hour drive/lack of own transport
? Family commitments - elderly father

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