This is an extract of our Redundancy Payments I Tutorial document, which we sell as part of our Employment Law Notes collection written by the top tier of University Of Law students.
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Redundancy Payments i-Tutorial INTRO?ELIGIBILITY?
Statutory claim; not all employees eligible Need to pass 4 tests:EMPLOYEE o Not self employed DISMISSAL o Contained in 136(1) ERA 1996:?DISMISSAL BY REASON OF REDUNDAN CY
Where an employer's need for an employee ceases or diminishes The redundancy payment is a reward for past services, the amount of which is prescribed by statute Payment should be made automatically at the end of the contract, but where employer fails to do this; employee may pursue claim in Employment Tribunal?o REQUISITE PERIOD o 2 years of continuous employment at the date of the termination of the employment EXCLUDED CLASS o Domestic servant for example, or a mariner o Only affect a minority of cases Definition contained in - and occurs in three situations
JOB REDUNDANCY o Easy to recognise as business ceases to operate; those eligible are therefore automatically entitled to a redundancy payment POW REDUNDANCY o Also relatively straightforward; closure of a branch for example,
business as a whole continues but one branch closes...
In such a situation there is still a possibility that an employee may not be entitled to redundancy payment; this is when employee has a mobility clause...
o Mobility clause allows employer to change employee's POW; employer may tell those workers with mobility clauses in their contracts that they have to move branch... a refusal to move by the employee will not trigger redundancy... the dismissal will be due to the employee's conduct rather than due to dismissal EMPLOYEE REDUNDANCY o Where employer does not need as many employees; may be due to rationalisation or because employees have been replaced with machines o?
It is usual for the employer simply to pay the money on termination of the contract... however:Employer may not actually want employees to leave; may want those from the redundant branch to move to another branch for example Employers who make re-employment offers MAY NOT have to make redundancy payments IF the employees refuse the offer; but there are conditions...
The offer of re-employment must comply with 141 ERA 1996:
- DISMISSAL BY REASON OF REDUNDAN CY
OFFERS OF REEMPLOYME NT?
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