Redundancy laws are essential because they protect staff and companies and make sure that everybody has due rights that have to be respected.
When they aren’t followed then trouble usually follows as we see in these recent cases.
Broadway Legal were a specialist personal injury and immigration solicitors based in Oldham who closed and were liquidated in December 2018.
A former member of staff was awarded a protective award of 90 days’ pay after they and colleagues were made redundant by text message.
When an employer dismisses 20 or more staff on the grounds of redundancy without collectively informing or consulting them they can be liable for a breach of collective consultation requirements which is what happened here.
The judge of the tribunal found that there was no proper warning or notice given or consultation with the workforce of Broadway Legal.
No employee representatives had been identified for any consultation and the first the claimant knew about the situation was when they received a text on Nov 11 telling them not to come to work on the 12th; and that a meeting would take place on Nov 14th.
The meeting was cancelled and on Nov 15th they were told they had been made redundant as of Nov 9th.
The firm was found to have breached its duty under the Trade Union and Labour Relations (Consolidation) Act 1992 and awarded the claimant the maximum possible amount – 90 days pay.
Protective awards are capped at 90 days or eight weeks pay. A claimant cannot receive a protective award and pay arrears for the same time period. If they have received pay arrears for this time then this will be deducted from an award as will 12% National Insurance.
If the award judgement is made in the same year as being made redundant then the award is also liable to be taxed at a standard rate of 20%.
The Redundancy Payments Service set out in detail what the legal requirements are for companies to follow for making staff redundant. If these aren’t followed then they could be liable for retrospective awards, even if they go into administration or liquidation.
If you’re facing a decision about making staff redundant or have been made redundant yourself then get in touch with us.
We can guide you through the legal hurdles you need to clear and see how much you could be owed in a redundancy payments, even if you’re a company director.