Redundancy – know your rights!

6 12 2008

Judging from the traffic on this site, redundancy is the big employment law issue at the moment and not surprisingly given the current climate. 1,000 job losses announced this week at Nomura, 650 at Credit Suisse and that on top of the losses at Goldman Sachs and Lehman Brothers. In my day job I am seeing plenty of people from investment banks and beyond, all with concerns and queries about either being told they’ve been selected for redundancy or are at risk. If you’re one of those people what do you need to know?

1. Are you an employee? Most employment protection legislation (apart from that involving discrimination issues) only covers employees and not self-employed people, for instance.

2. How long have you been continuously employed by your employer? To be able to claim a redundancy payment you need two years continuous employment experience. If you have this then you are entitled to be paid a “statutory redundancy payment” (SRP) in addition to your notice monies. SRP is not generous – £330 per complete year of service if you’re between 22-41 and £495 if you’re over 41. Your notice entitlement will be as set out in your contract of employment or as stipulated by the Employment Rights Act 1996 – basically 1 week per year of service up to a maximum of twelve weeks (four weeks notice minimum to be given by the employer once the employee has one month’s service).

3. If you have more than one year’s continuous employment experience then you have acquired the right not to be unfairly dismissed. This is a big topic but, in brief, it may allow you to argue that your selection for redundancy was unfair.

4. Have you been discriminated against? There are six main grounds for discrimination – race, sex, age, disability, religious belief and sexual orientation in addition to other grouds such as being subject to less favourable treatment because of being a fixed time or part-time worker. In addition whistleblowing is another type of claim that might be available. Remember it is your role that needs to be redundant, not you. What will happen to the work you do once you’ve left?

5. Most of the employees I see have been given a compromise agreement by their employer and they need an independent solicitor to advise them on their legal rights under the agreement. I have written elsewhere in this blog on compromise agreements and the issues they raise – see the page headed “compromise agreements” on the tab at the head of this blog for more information. One main reason why employers offer compromise agreements is that they want the employee to waive their rights to sue for unfair dismissal, discrimination, breach of contract etc. This is particularly the case if the employer is offering an enhanced package (in the City this is often, but not always, one month’s full pay per year of service).

6. If you have been given a compromise agreement then you will need to have it reviewed by a solicitor; give me a call if you want me to help. If you are unhappy about your selection or want further advice, get to see a solicitor and get some advice.

7. It is always helpful when seeing a new client to see the contract of employment, all correspondence relating to the redundancy situation and, of course, the compromise agreement.

Please call me on 0207 464 8433 or email me at if I can help you at all.