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Chapter

Cover Selwyn's Law of Employment

18. Redundancy  

The Redundancy Payments Act 1965 was enacted to compensate a long-serving employee for the loss of a right which he has in a job. The Act has been repealed and replaced by corresponding provisions in the Employment Rights Act 1996. This chapter discusses provisions of the Employment Rights Act 1996. It looks at what is a dismissal and the definition of redundancy, transferred redundancies, presumption of redundancy, and offers of alternative employment. Considered are whether redundancy dismissals are fair or unfair; offers of suitable alternative employment; excluded classes of employees; handling redundancies; claims for redundancy payments; payments by the Secretary of State; consultation on redundancies; the meaning of the term ‘establishment’; the consultation provisions of the legislation; and notification of mass redundancies to the minister.

Chapter

Cover Employment Law

6. Redundancy  

This chapter discusses redundancy law in the UK. Redundancy, which generally occurs when an employer reduces its workforce for economic reasons, is a common form of ‘potentially fair’ dismissal. There are three lawful ways in which selection for redundancy can be achieved: last-in-first-out, points-based approaches and employee selection processes. Redundancy payments must be equal to the statutory minimum and are often higher due to additional contractual arrangements which are more generous. Notice periods must also be honoured. UK redundancy law is often criticised because it is less procedurally cumbersome and requires employers to compensate less than is the case in other larger EU countries. This suggests that multi-national corporations dismiss their UK employees before counterparts elsewhere in Europe.

Chapter

Cover Employment Law in Context

18. Redundancy  

This chapter examines the statutory regulation of redundancy, together with the extent to which a statutory redundancy payment offers sufficient compensation for the loss of the employee’s job, and the financial and emotional disruption caused by the need to search for other employment. It considers other protections available to the employee who is about to be, or has been, made redundant. It then assesses the evolution of the present statutory regime and whether it strikes an appropriate balance between the personal financial costs and adverse social costs shouldered by UK taxpayers and the economy on the one hand, and the costs to the productive economy and the labour market on the other. The alternatives to redundancy are also addressed.