Workplace Restructure and Employee Rights. Overview
Employers are sometimes forced to change how their company is organised due to financial pressures or technological adaptations, raising various employment issues along the way.
These restructurings may sometimes entail a job role change or a shift in duties, though, in most instances, they involve staff reduction, which is where redundancy regulations come into play.
Redundancy is considered a fair reason for dismissing employees. Understandably, employers should not be forced to retain an employee or job role they don’t need anymore.
However, if your boss wants to make you redundant, they must meet specific conditions. You could file a tribunal claim for unfair dismissal if these requirements are not fulfilled.
Supposing your employer made you rightly redundant, you’d still be entitled to receive a statutory redundancy payment.
- Workplace Restructure and Employee Rights. Overview
- Requirements for Redundancy
- What Are My Rights During a Redundancy/Restructuring Process?
- Details on Rights During Redundancy
- The Redundancy Process and Selection Criteria
- Appeal and Redundancy
- Employment Tribunal Claim and Work Restructure
- Get Professional Help Dealing with Restructuring and Redundancy
- Frequently Asked Questions
Requirements for Redundancy
According to employment law, your employer can only make you redundant if:
- They cease running the business or an operation (or are planning to do so)
- They don’t need as many employees to carry out the same role
Apart from fulfilling these requirements, your employer has to follow a process to choose redundant employees using objective selection criteria.
What Are My Rights During a Redundancy/Restructuring Process?
As an employee, you have the following rights if you’re made redundant:
- A statutory redundancy pay
- A consultation with your boss
- A notice period
- An alternative job offer, whenever possible
- Time off to look for a new position
Statutory Redundancy Pay
You’re entitled to a statutory redundancy payment provided that you hold employee status and have been working for your employer for two or more years.
The amount you’ll get paid hinges on your age. Thus:
- If you’re under 22, you’ll receive half a week’s pay per full year
- If you’re between 22 and 41, one week per full year
- If you’re 41 or older, one week and a half per full year.
The maximum length of service for the purposes of this payment is 20 years. Also, the weekly pay amount for your redundancy pay calculation is the average amount you earned during the past 12 weeks before receiving your redundancy notice.
You will not receive statutory redundancy pay if you unreasonably reject an offer to fill another position or to keep you in the same role.
In the course of a redundancy process, your employer is obliged to consult with you or the employee or recognised trade union representatives, depending on the number of employees at risk.
During the redundancy process, you have the right to speak with your employer to:
- Ask why you’re made redundant
- Propose alternatives to redundancy
If your employer is making 20 or more redundancies simultaneously, the consultation should take place within 30 days before the first dismissal (or 45 days if involving more than 100 employees). Your employer would hold these redundancy consultation meetings with a representative, who can be either:
- A trade union representative
- An elected employee representative
A “collective consultation” (as it’s usually called) should address the following topics:
- Ways to reduce the number of dismissed employees or to prevent redundancies altogether
- The reasons for the redundancies
- The possibility of offering retraining to redundant employees
As one of the affected employees, you can participate in the elections for employee representatives as a candidate and/or as a voter.
Statutory Notice Period
Your notice period is the period your employer must grant you as a window for you to plan ahead and get a new job.
The notice period’s length depends on your time in the organisation. Hence:
- If you were employed between one month and two years: one week’s notice
- If employed between two and twelve years: one week’s notice per year of service
- If employed for twelve or more years: twelve weeks’ notice
Your employer has an obligation to pay you for the entirety of your notice period. Alternatively, they may offer to pay in lieu of notice (PILON) if they believe it’s not necessary for you to keep going to work.
Suitable Alternative Employment
If your employer has that possibility, they should offer you a suitable alternative role within the organisation. As mentioned earlier, if you don’t accept the proposal on unreasonable grounds, you might lose your right to claim redundancy pay.
The “suitability” of the alternative role largely depends on the following:
- The terms that are being offered
- Whether your skills match the demands of the new job
- The payment you’ll get in relation to the working hours, location, and status
- How similar this alternative job is to your current one.
If you accept the offer, you get granted a 4-week trial period. If you need training, you could ask for an extended trial period. This extension has to be agreed to in writing before the period begins.
During this trial period, you can let your employer know whether this new role fits. If you think it doesn’t suit you, you could still be eligible for redundancy pay upon quitting, though you’d have to give notice to your employer.
Time Off to Look for a New Job
If you worked for your employer for two years straight or more, you should be given adequate time off for job hunting or training in order to get another job. If you ask for time off, your employer only has an obligation to pay you up to 40% of your week’s pay unless the contract stipulates otherwise.
The Redundancy Process and Selection Criteria
Before making employees redundant, your employer would need to open a selection process by grouping similar roles in a “selection pool” according to a clear set of criteria.
Some characteristics should be excluded from the selection criteria as they would amount to discrimination. These include:
- Gender reassignment
- Sexual orientation
- Religious belief
- Role as a trade union representative or member
- Type of contract (part-time, fixed-term, etc.)
- Status as a married person or civil partner
- Concerns you might have raised on working time regulations, National Minimum Wage, or whistleblowing
- Any family-related leave
The selection process could measure aspects such as skills, experience, qualifications, and disciplinary records, among others. Your employer can also choose based on time in the company, though that could potentially be understood as discriminatory towards the younger employees within the workforce.
Appeal and Redundancy
If you believe your employer unfairly selected you for redundancy, you can appeal this decision by writing to your employer, following the internal procedure (if it exists). At this stage, your boss should summon you to a meeting to discuss the terms of your appeal letter.
You can ask them if you may be accompanied by a trade union representative or a coworker. The companion you decide to bring to the meeting can give support and take notes.
Employment Tribunal Claim and Work Restructure
If your employer made you redundant without following the correct legal procedures, you could file a claim at an employment tribunal for unfair dismissal within the next three months after receiving your redundancy notification.
Suppose you were dismissed because of a “protected characteristic” (age, sex, race, gender reassignment, religious belief, pregnancy, marriage, etc.). In that case, you could file your claim even if you didn’t reach two years’ employment.
We at IAS Law are conscious of the many things that could go wrong in both redundancy and restructuring processes and how they can affect you as an employee. Even the most insignificant misstep could seriously handicap you in a redundancy selection process, which is why it’s essential that you contact one of our qualified lawyers for support.
If you are aware of a possible redundancy process that you may be immersed in, call 03334149244. We’d be more than happy to assist you every step of the way.
You ought to receive your redundancy pay on your final payment date at most unless you have already arranged another date with your employer. They should also disclose how the payment will be made (a one-time payment or separate payments).
Your redundancy pay will have to be reported to the HMRC if it’s over ￡30,000. If it’s made before you leave your job and your employer gives you a P45 form, the taxable amount should be included in your final pay, and you’ll be taxed based on your normal tax code.
If you get paid after the employment ends, your employer will deduct the tax using the 0T tax code and hand you a letter describing the payment date, the gross amount, and the tax amount deducted under the PAYE (Pay-As-You-Earn) system. This means you could conceivably overpay taxes, though you could ask for a refund at the end of the tax year.
It may be if it’s a way to help them decide who to make redundant. However, you cannot be forced to resign before applying.
You’re free not to reapply, but that will only boost your chances of being made redundant later.
You should also understand that redundancy has to do with a change in the company’s organisational structure and this reapplication may help situate you better.