Terms & Conditions | Constructive & Unfair Dismissal | Redundancy | Grievance & Disciplinary Procedures | Compensation 

What about Redundancy?

• Where an employer reduces their workforce by way of redundancies certain procedures have to be followed throughout the process.

• These include:-
  • Objective and fair selection of employees for redundancy
  • Consulting with employees affected by redundancy;
  • Considering alternatives to redundancy;
  • Giving employees the correct notice periods and redundancy pay.

•  If these procedures are not followed an employee may have a potential claim against their employer at the Employment Tribunal. In such cases an employee can potentially claim for unpaid redundancy pay, wages, holiday pay and notice pay as well as unfair dismissal.

What if I am owed redundancy money from my employer but they cannot/will not pay?

• If an employer cannot or will not pay redundancy money owed to an employee then the employee can make a claim for payment to the Insolvency Service’s Redundancy Payments Office (RPO), a government scheme.

• Cannot pay - this will be where the employer has been declared legally insolvent. In this case the insolvency practitioner dealing with the employer’s business should send out a claim form, known as an RP1, to affected employees. Once the RP1 form is completed the RPO can process the claim and make the appropriate payment to the employee.

• Will not pay - if the employer is not legally insolvent then the employee can make a claim direct to the RPO if they have an Employment Tribunal award which the employer has not paid. The employee would have to have first sought payment from the employer before making their claim to the RPO though.

• Please note that there are no guarantees that claims will be paid in full. There are limits on how much the RPO can pay out – the maximum payment for any one week’s outstanding pay is currently £400. If the employee is owed more than the limits of the RPO scheme then the liability for any further redundancy payments remains with the employer. The employee would then have to proceed with a claim to the insolvency practitioner dealing the employer’s insolvency.

Please note that the information above is intended only as a guide and for specific advice on any of the above or related matters we would always recommend that you seek independent legal advice.