DISCUSS THE OBLIGATIONS OF THE EMPLOYER WHO INTENDS TO LAY OFF

EMPLOYEES UNDER WHAT IS TERMED A REDUNDANCY AND SITUATIONS IN

WHICH REDUNDANCIES MAY NOT ARISE.
Redundancy occurs where an employees work is no longer required or where his or her
employer has ceased to carry on business at the employees place of work, a
redundancy situation arises. It also arises when the employer has ceased to carry on
the business at the work place at which the employee was employed or has ceased to
carry on business at the place at which the employee was employed or no longer has a
requirement for the work.
Before moving on however, it is important that redundancy is first defined in order to
ensure our understanding of the subject.
Redundancy can be referred to as a loss of a particular job following re-organization or
restructuring of a given employing agency resulting in the abolishing of certain job
categories.
s. 139 of the ERA 1996 also defines redundancy as the dismissal of an employee wholly
or mainly on act of:
a) the fact that his employer has ceased or intends to cease to carry on the
business for the purpose of which the employee was employed by him or he
ceased or intends to cease, to carry on the business in place where the
employee was so employed or
b) The fact that the requirement s of the business for employees to carryout work of
a particular kind where he was so employed, have ceased or diminished or are
expected to cease or diminish.
The fiction is that jobs become redundant not people but the same effect. If there is
no work, then there is no need for employees. The most frequent cause of
redundancy at the present time in the organizations is the intention to reduce its
staffing levels in order to cut costs or take advantage of technological advances
which require fewer people to operate.

At this level of detail about redundancy, we can now discuss the obligations of the
employees under what is termed as redundancy and situations in which
redundancies may not arise.
In order to ensure that the redundancy may not be held to amount to an unfair
dismissal, it is important that the employer should follow his obligations under the
legislation on redundancy. Other redundancy issues are affected considerably by the
statutory minima required by legislation (For example EMPLOYMENT
PROTECTION (consolidation) ACT, 1978). There are minimum obligations set by
current legislation in respect of:
1. The timing and terms of notice to be given
2. The amount of redundancy pay or severance pay to be paid to the employee.
The first thing, on the obligation of the employer when he intends to lay off
employees under redundancy is notification.
Notification of redundancies under TULR (C) A of 1992 says, the employer has a
duty under the EPA to notify both recognized trade unions and the secretary of state
for employment of forthcoming redundancies.
The notice required to be given refers to the advance warning of impending
redundancies to be given by the employer.
1. NOTIFICATION OF TRADE UNION
The legal position is that where an employer is proposing to dismiss as redundant
any employee of a class in respect of a trade union recognized for collective
bargaining purposes must consult with the representatives of the that union at the
earliest opportunity and in any event comply with the following timings:
-

Where it is proposed to dismiss 100 or more employees at one establishment

within a period of 90 days or less , notification must be given at least 90 days
before the first of the dismissals take effect

Where it is proposed to dismiss 10 or more, but less than 100 within a period of
30 days or less, notification must be given at least 30 days before the first
dismissal takes effect.

The employer must begin consultations with the trade union representatives before
giving individuals notices of dismissal.
In National Union of Teachers Vs Avon County Council (1978)
The facts: the employers issued dismissal notices to some teachers on 28 th October,
1976. Consultation over redundancies with the recognized independent union was
not started until 29th October, 1976
Decision: it was held that the employer failed to comply with the rulers, in that
individual notices of dismissal should not have been issued before consultation
began.
2. CONSULTATION
For the purposes of consultation, the employer must disclose in writing to the trade
union representatives the following;
I.
II.
III.
IV.
V.

Reasons for the proposed redundancies

Number and description of the employees involved
Total number in that category employed at the establishment
Proposed method of selection for redundancy
Proposed method of carrying out the dismissal

The employer must consider any representatives made by the trade union, reply to
those representations and where he rejects any of them, and state his reasons.
Failure to consult may render the employer liable to a claim for unfair dismissal and a
complaint by the trade union to an employment. This mean lead to the union or other
affected parties been awarded damages or a protective award. A bill before parliament
(the EMPLOYEE CONSULTATION RIGHTS BILL 2001), will require, if it becomes law,
all employers with more than 50 employees to consult the workforce representatives on
large business issues which directly affect employees.
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Protected award mentioned above, is where a trade union makes a complaint, which is
uphold by the tribunal, the tribunal may make a protective award. In this case the
employer will have to pay remuneration to the specified employees for a protected
period. This is the period beginning with the date on which the first of the dismissals
take effect or the date of the award whichever is the earlier.
The maximum awards permitted are:
(a) Up to 90 days pay where a minimum of 90 days notice should have been given
(b) Up to 30 days pay where a minimum of 30 days notice should have been give or
(c) Up to 28 days pay in any other case
In Joshua Wilson and Bros Vs Usdaw (1978)
The EAT made a protection award of 40 days because it found that on 31 st January
1977 the employees were told that they were being made redundant as from 26 th
February that year, since the warehouse in which they were working was closing down.
The employees recognized the independent union for collective bargaining purposes
and there were no special circumstances in which the employers could claim exemption
from their duty to consult the union.
Any payment of ways made by an employer to an employee in respect of any period
covered by a protective award will offset the protective award.
An employer who fails to consult with the trade union may use a defense that special
circumstances existed which made it impracticable to consult. Nevertheless, he must
show that he has taken such steps to comply as are reasonably practicable. An
employee himself cannot apply for a protective award but may complain to an industrial
tribunal if he fails to receive full payment of any such award.

3. Notification to the department of employment

The employer also has a duty to notify the Department of Employment when
redundancies are proposed. The requirement is as for trade union. Failure to notify
the Department of Employment may lead to a fine.
4. REDUNDANCY PAYMENT
In certain circumstances an employee may receive compensation for the loss of his
job. The amount of compensation is related to the age, length of service and
average weekly earnings of the redundant employee. The purpose of the
redundancy payments scheme is to compensate for loss of security and to
encourage employees to accept redundancy without damaging industrial relations.
Disputes about entitlement to payment and other things are settled by employment
tribunals. The law relating to redundancy payment is contained in the Employment
Rights Act 1996 S.135
Redundancy payments follow the basic provisions contained in the Employment
Rights Act 1996 are based on age and length of service the rates are as follows

Aged under 22 =1/2 weeks pay year of service

Between 22 and 40 = 1 weeks pay per year of service
Between 41 and 60 (women) or 65 (men) = 11/2 weeks pay per year of
service

The maximum number of weeks pay that can be claimed is 30 weeks, while the
maximum amount payable per week is subject to change each year. For a person to
be entitled to redundancy:
a.
b.
c.
d.

An employee
Continuously employed for the requisite period
Dismissed and
Dismissed by reason of redundancy

Lord Dennings explanation of redundancy may be a helpful starting point

A worker of long standing is now recognized as having an accrued right in his job
and his right gains in value with the years. So much so that if the job is shut down he
is entitled to compensation for loss, it is not unemployment pay, even if he gets
another job straight way, he nevertheless is entitled to full redundancy payment.
(a) Employee is defined as an individual who has entitled into or works under (or
where the employment has ceased) a contract of employment. in cases where
the employer disputes that the applicant was an employer the applicant to prove
that he was in fact an employee
(b) Continuous Employment for the requisite period
The applicant must have been in continuously employed for a period of two years
ending with relevant date.
The following events do not break continuity
1. Change in job with the same employer
2. Change in ownership of the business , when a business that is wholly or
partly carried on in the one country is transferred from one person to
another
(c) The meaning of dismissal
By s.136 an employee will be taken to be dismissed by his employer if;
1. The contract under which he is employed by the employer is terminated by
the employer , whether it is terminated by notice or not,
2. Where under that contract he is employed for a fixed term which expires
without being renewed under the same contract or
3. The employee terminates the contract with or without notice where his
employers conduct is such as to justify the employee leaving without
notice (constructive dismissal)
There is no dismissal and therefore no redundancy payment where an employee leaves
voluntarily or where the contract is frustrated.

In Morton Sundour Fabrics Ltd Vs V Shan (1966)

Shan was employed in the companys velvet department. He was notified that his job in
that department was likely to end some months time Shan found job elsewhere and left
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MSF Ltd. It was held that Shan was not entitled to a redundancy payment as he had left
voluntarily without having had notice from his employer.
(d) Redundancy must be the reason for dismissal
Redundancy is defined by s.139 as the dismissal of an employee wholly or mainly on
account of:
The fact that his employer has ceased , or intends to cease, to carry on the business for
the purposes of which the employee was employed by him or he ceased, or intends to
cease to carry on that business in the place where the employee was so employed.
In European Chefs Vs Currell Ltd (1971)
A pastry cook was dismissed because the requirement for his specialty (clairs and
meringues)had ceased and there become a requirement to produce continent all
parties, for which another person was taken into employment. It was held that the pastry
cook was entitled to redundancy payment as the need for cook of his type had ceased.
In VAUX AND ASSOCIATE BREWERIES Vs WARD (1969)
A quiet public house was converted into a discotheque. The landlord dismissed the
57years old barmaid as he required a younger person (a bunny girl)to attract customers.
It was held there was no entitlement to redundancy payment as there had been no
change in the nature of the particular work by one twelfth of each month by which the
age of the employee approaches retirement, that lower age limit does not count for
calculation of the basic award for unfair dismissal.
(C)