An employee being made redundant may be eligible for certain other rights as well as redundancy pay, including:
A notice period
A consultation with their employer
The option to move into a different job
Time off to find a new job.
However, under the ERA 1996, an employee has to fulfil certain conditions to be entitled to redundancy pay:
They were an employee
They were dismissed because of redundancy.
They have been continuously employed for two years
They have been dismissed
The amount of redundancy pay is based on:
Gross average wage
Length of continuous employment
Employees must be selected for redundancy in a fair way e.g. because of level of experience or capability to do the job.
An employee cannot be chosen for redundancy because of factors which might contravene the Equality Act 2010 or are unfair – such as age, gender, disability, pregnancy. If this happens, it might be classed as an unfair dismissal.
Employees may be offered a Settlement Agreement by their employer – formerly called a Compromise Agreement – to prevent the employee making a claim for redundancy at an Employment Tribunal.
This is a binding agreement, and it is vital to take expert legal advice before accepting a Settlement Agreement.