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Redundancy in United Kingdom law concerns the rights of employees if they are dismissed for economic reasons in UK labour law.
Section 139 of the Employment Rights Act 1996 defines the two situations in which a redundancy may occur:
(a) the fact that his employer has ceased or intends to cease—
- (i) to carry on the business for the purposes of which the employee was employed by him, or
- (ii) to carry on that business in the place where the employee was so employed, or
(b) the fact that the requirements of that business—
- (i) for employees to carry out work of a particular kind, or
- (ii) for employees to carry out work of a particular kind in the place where the employee was employed by the employer,
have ceased or diminished or are expected to cease or diminish.
While the first case envisages situations where an employer simply closes his business, the second scenario has caused trouble in its interpretation.
Geographical test now favoured, Bass Leisure Ltd v Thomas, best of both worlds for the employer potentially, though in that case the EAT made clear that any use of mobility clauses must be subject to the employee's situation.
Bessenden Properties Ltd v Corness establishes the main principles on fairness of procedure, with Williams v Compair Maxam Ltd affirming it.
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Redundancy payments are defined in law.
In 2002, the Court of Appeal ruled in a case brought by staff employed at Albion's Farington site in Lancashire, Albion Automotive Ltd w. Walker and others, [1] that a contractual term entitling employees to an enhanced redundancy payment could be implied into the employees' contracts of employment based on the employer's custom and practice. [2]
However, in a different 2002 decision in the Employment Appeal Tribunal, Warman International v Wilson, [2] Mr Wilson's claim of being entitled to an enhanced redundancy payment, supported by the Employment Tribunal meeting in Leeds in 2000, was overturned because previous enhanced levels of redundancy payment had on each occasion been made on a case-by-case decision and the employer, when making comparator payments to other staff made redundant, had specifically asserted that enhanced payments for some staff created no precedent on which other staff could subsequently rely. [3]
United Kingdom labour law regulates the relations between workers, employers and trade unions. People at work in the UK have a minimum set of employment rights, from Acts of Parliament, Regulations, common law and equity. This includes the right to a minimum wage of £11.44 for over-23-year-olds from April 2023 under the National Minimum Wage Act 1998. The Working Time Regulations 1998 give the right to 28 days paid holidays, breaks from work, and attempt to limit long working hours. The Employment Rights Act 1996 gives the right to leave for child care, and the right to request flexible working patterns. The Pensions Act 2008 gives the right to be automatically enrolled in a basic occupational pension, whose funds must be protected according to the Pensions Act 1995. Workers must be able to vote for trustees of their occupational pensions under the Pensions Act 2004. In some enterprises, such as universities or NHS foundation trusts, staff can vote for the directors of the organisation. In enterprises with over 50 staff, workers must be negotiated with, with a view to agreement on any contract or workplace organisation changes, major economic developments or difficulties. The UK Corporate Governance Code recommends worker involvement in voting for a listed company's board of directors but does not yet follow international standards in protecting the right to vote in law. Collective bargaining, between democratically organised trade unions and the enterprise's management, has been seen as a "single channel" for individual workers to counteract the employer's abuse of power when it dismisses staff or fix the terms of work. Collective agreements are ultimately backed up by a trade union's right to strike: a fundamental requirement of democratic society in international law. Under the Trade Union and Labour Relations (Consolidation) Act 1992 strike action is protected when it is "in contemplation or furtherance of a trade dispute".
Unfair dismissal in the United Kingdom is the part of UK labour law that requires fair, just and reasonable treatment by employers in cases where a person's job could be terminated. The Employment Rights Act 1996 regulates this by saying that employees are entitled to a fair reason before being dismissed, based on their capability to do the job, their conduct, whether their position is economically redundant, on grounds of a statute, or some other substantial reason. It is automatically unfair for an employer to dismiss an employee, regardless of length of service, for becoming pregnant, or for having previously asserted certain specified employment rights. Otherwise, an employee must have worked for two years. This means an employer only terminates an employee's job lawfully if the employer follows a fair procedure, acts reasonably and has a fair reason.
American Axle & Manufacturing, Inc. (AAM), headquartered in Detroit, Michigan, is an American manufacturer of automobile driveline and drivetrain components and systems.
The Transfer of Undertakings Regulations 2006 known colloquially as TUPE and pronounced TU-pee, are the United Kingdom's implementation of the European Union Transfer of Undertakings Directive. They are also used in Ireland. It is an important part of UK labour law, protecting employees whose business is being transferred to another business. The 2006 regulations replace the old 1981 regulations which implemented the original Directive. The law has been amended in 2014 and 2018, and various provisions within the 2006 Regulations have altered.
A severance package is pay and benefits that employees may be entitled to receive when they leave employment at a company unwillfully. In addition to their remaining regular pay, it may include some of the following:
The Employment Rights Act 1996 is a United Kingdom Act of Parliament passed by the Conservative government to codify existing law on individual rights in UK labour law.
Nethermere Ltd v Gardiner And Another [1984] ICR 612 is a UK labour law case in the Court of Appeal in the field of home work and vulnerable workers. Many labour and employment rights, such as unfair dismissal, in Britain depend on one's status as an "employee" rather than being "self-employed", or some other "worker". This case stands for the proposition that where "mutuality of obligation" between employers and casual or temporary workers exists to offer work and accept it, the court will find that the applicant has a "contract of employment" and is therefore an employee.
United Kingdom agency worker law refers to the law which regulates people's work through employment agencies in the United Kingdom. Though statistics are disputed, there are currently between half a million and one and a half million agency workers in the UK, and probably over 17,000 agencies. As a result of judge made law and absence of statutory protection, agency workers have more flexible pay and working conditions than permanent staff covered under the Employment Rights Act 1996.
Taylor v Connex South Eastern Ltd (5.7.2000) Appeal No: EAT/1243/99, is a UK labour law case, concerning the TUPE Regulations.
Williams v Compair Maxam Ltd [1982] ICR 156 is a UK labour law case, concerning unfair dismissal, now governed by the Employment Rights Act 1996.
Polkey v AE Dayton Services Ltd [1987] UKHL 8 is a UK labour law case, concerning unfair dismissal, now governed by the Employment Rights Act 1996.
In labour law, unfair dismissal is an act of employment termination made without good reason or contrary to the country's specific legislation.
Buchan and Ivey v Secretary of State for Trade and Industry [1997] IRLR 80 is a UK insolvency law and labour law case, concerning the protection of employees' salaries on their employer's insolvency.
An employment contract in English law is a specific kind of contract whereby one person performs work under the direction of another. The two main features of a contract is that work is exchanged for a wage, and that one party stands in a relationship of relative dependence, or inequality of bargaining power. On this basis, statute, and to some extent the common law, requires that compulsory rights are enforceable against the employer.
Lesney Products & Co v Nolan [1976] EWCA Civ 8 is a UK labour law case concerning redundancy.
Cable & Wireless plc v Muscat [2006] EWCA Civ 220 is a UK labour law case, concerning the test for an implied contract between an employee and a place they work through an employment agency. It holds that with reference to the reality of the relationship, an implied contract should be found according to the ordinary rules of construction.
Reda v Flag Ltd [2002] UKPC 38 is a case from Bermuda law, advised upon by the Privy Council, that is relevant for UK labour law and UK company law concerning the dismissal of a director.
Safeway Stores plc v Burrell [1997] ICR 523 is a UK labour law case, concerning redundancy.
High Table Ltd v Horst [1997] EWCA Civ 2000 is a UK labour law case, concerning redundancy in English Law in the Court of Appeal, the highest court within the Senior Courts of England and Wales, and second only to the Supreme Court of the United Kingdom.
E Green & Sons (Castings) Ltd v ASTMS [1984] IRLR 135 (EAT) is a UK labour law case, concerning the information and consultation in the European Union.