Redundancy
Drawing on vast experience, our employment lawyers in Scotland help employees navigate redundancy and business reorganisation.
From employee protections to employer obligations, we provide legal advice to help affected employees understand their position and ensure processes are carried out fairly and legally.
What is redundancy?
A redundancy situation is defined in statute as being where:
- The whole business has ceased to carry on or intends to. In other words, the entire business has closed or is closing.
- The workplace in which the employee works has closed or is closing.
- The requirement for employees to carry out work of a particular kind has ceased or diminished. Put simply, there is a reduction of work in the business.
A redundancy situation can be brought about due to several factors. These include financial difficulties, changes in technology, business streamlining, or moving to a new sector, all of which can be very difficult for employees.
Protections and issues for employees facing redundancy
If your employer proposes to make redundancies, it ought to follow a fair procedure when dismissing. This involves fair warning and consultation about the redundancy. There should also be a fair selection pool and selection criteria, consisting of suitable alternative employment, and giving those dismissed an opportunity to appeal.
Fair consultation
Fair consultation is seen to have taken place where the consultation occurs when the proposals are still at a formative stage. To be classed as fair, adequate information should be provided on which to respond and you should be given adequate time to respond. Conscientious consideration should also be given to the response.
Selection pool and selection criteria
Often, the employer will draw up a selection pool of employees at risk of redundancy. It will then apply a scoring matrix to those within the pool to decide which of its employees be made redundant. Employers have a fair amount of flexibility in defining the pool from which they will select employees for dismissal.
Please note however that the tribunal will largely be unwilling to carry out a detailed re-examination of how the employer applied the selection criteria to those within the selection pool.
Alternative employment
In a redundancy situation, you may be offered an alternative position within the organisation. If you accept the alternative employment, you’ll have a four-week trial period. If you don’t meet set requirements during this period, you may be made redundant or be placed in another position.
If you refuse a further alternative or leave the role without good reason, you may lose your right to statutory redundancy pay. You can also lose this right if offered alternative suitable employment, but you refuse without reasonable grounds.
In these situations, you should speak to an employment lawyer, who can give you a better understanding of your position.
Notice periods
Employees made redundant are entitled to a notice period before leaving their role. This will correspond to their time served with the company.
Notice periods in Scotland are as follows:
- You’ll receive a week’s redundancy notice period if you’ve served between one month and two years at the company.
- If you’ve worked there for over two years, your notice period will be one week per year of service, to a limit of 12 weeks.
However, your employment contract might stipulate longer notice periods, and they can’t be shortened.
Statutory redundancy pay
If you’ve worked with your employer for two years or more, you’ll be entitled to statutory redundancy pay. The length of service is capped at 20 years.
Statutory redundancy pay is worked out as follows in Scotland:
- Half a week’s pay for each full year you were under 22.
- One week’s pay for each full year you were between 22 and 41.
- One and a half week’s pay for each full year you were 41 or older.
If you were made redundant on or after 6 April 2024, your weekly pay will be capped at £700, and your maximum statutory redundancy pay will be £21,000. Amounts will be lower if you were made redundant before this date.
Appealing an individual redundancy
As an individual, if you dispute the fairness of your redundancy dismissal, you would be best advised to appeal the decision to dismiss. Your appeal should be made to senior staff members who weren’t involved in the redundancy decision.
If you are successful, you may be reinstated.
How group redundancies work
If your employer is making or is proposing to make 20 or more employees at one establishment redundant, there’s a statutory obligation to consult you as a group; this could be via your trade union or by selecting employee representatives. Employers should also attempt to find alternatives to redundancy if possible.
Employees should be told the reasons for redundancies, whether the number of redundancies can be reduced, and if there are any training opportunities for staff to find new positions in the company.
Your employer should contact the Redundancy Payments Service (RPS) at least 30 days before redundancies of between 20 and 99 staff members. If the number of redundancies is more than 100, there should be a notification 45 days in advance.
If your employer does not follow the correct procedure when proposing to make 20 or more employees at one establishment redundant, you may have an actionable claim for a protective award.
How we can help
Our team of employment lawyers work with employees in Scotland, ensuring that you’re treated legally and fairly in cases of redundancy. We help you understand what your employer needs to do, and what information you should request during the redundancy process.
Our team may help you appeal a decision if you feel there are tangible signs of unfairness. We can also help you through the tribunal process and ensure you understand your situation.
If you’re facing redundancy as an individual or collective, don’t hesitate to contact Allan McDougall Solicitors.
Contact us
- Email us
- Call free on 0808 560 0872
- Arrange a callback by using our enquiry form
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