Redundancy often brings with it a valuable tax free payment. A redundancy can occur in many and varied circumstances. It is not confined to a shortage of work for a company restructure where it involves an employee’s termination of employment. Some companies seek to avoid paying out a redundancy to minimise costs. Let’s face it, many employers see paying redundancy as giving money away.
Therefore, some companies choose to performance manage an employee to the point of dismissal rather than pay out a redundancy. In extreme cases an employee can be targeted for dismissal on grounds of serious misconduct. That carries with it a stigma which may prevent the employee from easily gaining future employment with the company’s competitor.
In a true redundancy situation, the company should consult the affected employee(s) early. This will be followed by the declaring the position(s) redundant. Then, every effort should be made to find a suitable alternative role within the company. If that cannot be done, a redundancy payment and proper notice should be made. Not all companies comply with this process.
Some employers seek to superficially comply such as a claim to look for an alternative suitable role but do not do so. Others will target employees with attributes such as poor health, intruding marital or parental responsibilities or even pregnant employees. This is obviously unlawful.
Where a company has not followed a proper process, the employee should check if the law has not been broken.
If you are made redundant, you are entitled to a redundancy payment that is proportionate to the length of your employment, ranging from 4 weeks to 16 weeks of pay. However, if you take advice, you might also receive additional compensation for damage to reputation, humiliation or pay in lieu of notice.
If you feel like your company is not complying with the process, take advice.
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