Unfortunately I was told by my firm that we need to make some redundancies and the shareholders only want to give a week's notice. Looking at the ACAS guide on small scale redundancies it says:
Notice periods for redundancy are usually the same as those you would give when terminating a contract of employment. At the very least, it needs to be the longer out of a) what’s in the employee’s contract, or b) what their minimum statutory entitlement would be.
I'm I correct to say if in our contracts we have 3 month termination notice, then we need to give 3 months notice plus the redundancy package if it applies to those over 2 year service?
Any guidance will be appreciated.
Thank you
Stacy
Replies
Hi Stacy
Sorry to hear that you are in a potential redundancy situation.
In terms of the notice it will be whatever is in the contract or the statutory minimum whichever is the greater e.g. it may say one month in the contract but if they have 7 years' service it will be seven weeks' notice. This will apply irrespective of if they qualify for a redundancy payment or not. If there is no contract it will be the statutory minimum one weeks' notice for each year of continuous service up to a maximum of 12. What the shareholders may be referring to is a one week consultation period? Which I would consider as short but it depends on the number of roles affected and why the need for redunancies has arisen.
Do you have a pay in lieu of notice clause in the contract? If so this would enable to you pay notice as opposed to employees working their notice. Also remember that you should not serve notice until you have completed 'full and meaningful' consultation, and the length of the consultation period depends on how many roles are being made redundant.
I can see you have accessed the ACAS stuff there is some also good info here which may help:
http://www.cipd.co.uk/hr-resources/factsheets/redundancy.aspx
A couple of top tips spend time on the planning once you have announced the potential redundancies things move fast. Also remember they are always proposed redundancies at this stage until you have fully concluded the consultation. The workforce may have ideas of how to avoid the redundancies which should always be the focus of the business. Have you explored other ways of avoiding the need for redundancies e.g. recruitment freezes, reducing overtime, reducing the use of agency staff and also layoffs (if you have a lay off clause in the contract). Sometimes the workforce will be prepared to work shorter weeks for a temporary period if this means the need for redundancies can be avoided.
I know a lot of my learners have recently been going through redundancies and it would be really great if you could share with Stacy some top tips for handling redundancies.
I hope the above helps
Regards
Sarah
I'm I correct in understanding the below?
- As all staff have three month termination period in their contract, our minimum has to be three month notice which is paid.
- If anyone has been employed longer than two years they also receive redundancy pay of one week for every year they have been employed. This can be calculated in the .gov.uk website.
Hi Stacy
Sorry I missed your post.
Staff will receive 3 months' notice which you can either choose to pay in lieu (if you have a contractual clause) allowing you to do so or you serve notice and they work their notice.
In terms of redudancy pay, employees with 2 years' service receive:
Length of service is capped at 20 years and weekly pay is capped at £475. The maximum amount of statutory redundancy pay is £14,250. So someone who is less than 22 received 0.5 weeks' pay for each year of service.
You can always call ACAS if you want to run something past them 0845 7474747, and don't forget the CIPD Legal Helpline which you can call free as a member, (up to 12 times per year) if you want a legal bods view. If you can't find the number let me know and I will post the details.
Good Luck
Sarah