|
To find out how we can make such an impact on your recruitment needs
Contact us on:
Northampton
01604 239555
Kettering
01536 416615
|
|
 |
|
|
|
| Industry News |
 |
Redundancy
September 2008
REDUNDANCY
NO NOTICE, NO REDUNDANCY PAY ….
A redundant employee agreed to a four week trial period of alternative work but resigned shortly after saying he was entitled to a statutory redundancy payment. On what grounds could you refuse to pay him?
Statutory trial period
One of the objectives of consultation in a redundancy situation is for you to identify suitable alternative jobs which employees could take up on their dismissal from their redundant post. The Employment Rights Act 1996 (ERA) provides a 28 day statutory trial period for the employee to try out the alternative post to see whether it’s acceptable to them. The alternative job must be expressly offered by you and accepted by the employee as a contract of re-engagement, because the old contract came to a complete end when they were made redundant. It’s possible to agree a longer period than four weeks, but this extension can only be granted in limited circumstances involving re-training for the new job.
Notice must be given
To qualify for a statutory redundancy payment the employee must give you notice to terminate the new contract during the statutory four-week trial period. The ERA states that this entitlement only arises if the new job is unsuitable and the employee acts reasonably in rejecting it.
Tip. If they continue in employment beyond 28 days in the post, even for one additional day, they will forfeit the right to statutory redundancy pay. By simply following the statutory rules you will not be committing a breach of contract entitling the employee to resign and claim constructive dismissal.
But. Of course, it’s possible for the employee to successfully bring both unfair and constructive dismissal claims against you during the trial period as their continuous service will have been preserved. This assumes the facts justify such a claim, but denial of statutory redundancy pay after the expiry of the 28 day period is not one of them.
Is the old contract still valid?
Once the new contract takes full effect, the employee cannot claim constructive dismissal because of an alleged repudiatory breach by you during their employment under the old contract. If they wanted to make such a claim they should have resigned before the expiry of the old contract and that job came to an end. This rule applies irrespective of the length of the trial period and whether or not it runs its full period of 28 days. Of course, there’s nothing to stop them resigning and claiming constructive dismissal because of an alleged repudiatory breach during the trial period.
Help for the employee
It could be mutually helpful if you remind affected employees about the statutory rules on taking up alternative work following redundancy. This could avoid potentially costly litigation and the creation of bad feeling between you and your staff. It might even be worthwhile inserting into a redundancy policy or procedure the need for key information of this type to be given to employees caught up in the redundancies.
Tip. You need only make statutory redundancy payments to employees who resign during the four week trial period. Once that period has finished you should not make any statutory payments. However, it could be useful to remind all affected staff and responsible managers how these rules operate to avoid future complications.
The good news is that if an employee continues in employment beyond the 28 day period, even by just one day, they lose the right to a statutory redundancy payment. Remind staff of this fact before they start their trial periods to avoid future problems.
« back
|
|
|
