Redundancy Introduction

  • Created by: jutnut
  • Created on: 24-07-17 16:37

What is redundancy?

When an employee becomes surplus to the requirements of the job. 

If dismissed because if this then s/he has been made redundant and is entitled to redudancy payment.

Therefore the payment is effectively compensation for the loss of the employment reather than compensation for future losses or money to tide the employee over until he gets another job.

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Preliminary Questions

As with Unfair Dismissal to claim a redudancy payment individual must be: 

  • An Employee
  • Not a member of an excluded class
  • Still have 2 years of service (s.155ERA) 
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Employees who will not be eligible for redundancy

i) if an employee unreasonably refused an offer of re-instatment in his job

ii) If the employee unreasonably refuses an offer of alternative suitable work s.141

iii) where the employee has been dismissed for misconduct (s.140)

iv) where the employee is under notice of redudancy and leaves early 

v) where a pension is payable in some circumstances 

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Excluded classes

  • Crown employees and certain public officials 
  • Overseas employees
  • Employees employed by an overseas government s.160
  • Relations working as domestic servants s.16 
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What amounts to a dismissal s.136

i) Termination with or without notice

ii) Expiry of a limited term contract w/o renewal 

iii) Constructive dismissal

iv) Resignation of an employee under notice of dismissal by reason of redudancy

v) Certain cases where the contract is terminated by operation by law

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Ambiguous Notices & Voluntary Redundancy

Ambigous notice:

Termination date must be known. A notice warning to employees that there will be redundancy will not act as a dismissal because the date of termination will not be certain. 

Voluntary redundancy: 

A person who volunteers to be made redundant may do so as a response to inducement by the employer. 
Amounts to dismissal? Depends on the facts consensual termination v dismissal

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Definition of Redundancy

Incorporates 3 ideas: 

I) Business Disappears 

II) Workplace Disappears 

III) Job Disappears 

Under s.139ERA

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Business disappears

Business is defined widely and includes trade, profession or any activity carried on by a body of persons. 

Rarely any dispute here.

In short the business has gone under and is no longer trading. 

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Disappearing workplace

Where exactly IS  the workplace? Geographical/ factual or contract test 

(Which is now obsolete in light of case law) 

Basically can the employee reasonably continue travelling to the new work branch? 

If the other work branches cannot offer re-engagement then cannot have job. 

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Disappearing job

Common law approach (now obsolete) - Now Safeway Stores v Burrell

(a) was the employee dismissed? 

(b) had the requirements of the employer's business for the employees of that kind ceased or diminished or expected to cease or diminish?

(c) if so, was the dismissal of the employee ceased wholly or mainly by the state of affairs of (a) 

Employer justbhas to show s.139 and a causal connection in line with the facts.

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