News and Insights

What is redundancy?

Redundancy is defined in Article 2(1) of the Employment (Jersey) Law 2003 (the “Employment Law”).

In essence a person is made redundant if their employment is terminated by the employer because:

• there has been a workplace closure; or
• the business has ceased to carry out work of the kind undertaken by the employee or work of a particular kind or there is a reduced need for such work (e.g., because of a change in direction of the business or a drop in work).

Employees’ right to pursue claims where employer does not comply with statutory obligations

A redundancy situation gives rise to a range of employment rights, details of which are set out in the Employment Law. A failure by the employer to comply with statutory obligations may give affected employees the right to bring claims in the Jersey Employment & Discrimination Tribunal (the “Tribunal”).

Key rights

Procedural fairness and unfair dismissal

Where a business is considering making redundancies it must follow a fair, careful and appropriate procedure including taking steps to:

• Warn and consult affected employees about potential redundancies
• Apply an appropriate selection pool and fair selection criteria when deciding which employees may need to be made redundant
• Explore alternatives to redundancy

Where an employer fails to comply with requirements, and where protection from unfair dismissal applies (depending on factors including length of service), a dismissed employee may be able to challenge the fairness of the redundancy procedure.  If an unfair dismissal claim is successful a claimant may be awarded up to 26 weeks’ basic pay, depending on length of service.

Collective consultation

Where 12 or more employees at one establishment may be made redundant in a 30-day period the employer must carry out collective consultation with elected employee representatives.

Termination on basis of redundancy

A redundant employee is entitled to receive:

• Full pay and contractual benefits up to the final day of employment
• Including statutory or contractual notice, whichever is the greater
• And if the employee has 2 years’ continuous employment:
  • Statutory redundancy pay – see below
  • Paid time off work to re-train or seek alternative employment (2 days’ paid leave if the person works a 5-day week)

There may also be other entitlements, eg in respect of accrued untaken annual leave (calculated on a pro rata basis) if the person has not been able to take accrued leave prior to the termination date.

Statutory redundancy pay

An employee who has been continuously employed by the employer for 2 years or more at the termination date, who is made redundant, will have an entitlement to a statutory redundancy payment (“SRP”).  This is calculated as follows:

• Number of complete continuous years’ employment
• A week’s basic pay

For SRP calculation purposes the upper limit of a week’s pay is capped at £820.00/week.  (This is the maximum as at 28 September 2021.  Please note that this figure is normally reviewed annually.)

Alternative employment

If the employee is offered and unreasonably refuses an offer of suitable alternative employment, the person may no longer have a right to a statutory redundancy payment. When determining suitability, the Tribunal considers factors such as: skills and aptitude, the terms of the new job offer compared with the old contract, job description, pay, hours and responsibility.  When considering whether the employee’s refusal was reasonable, the Tribunal is likely to consider the circumstances under which the offer is made, the duration of the employment and the employee’s personal circumstances.

Tribunal claims

There are strict time limits on bringing claims in the Tribunal. In Jersey unfair dismissal claims must be lodged with the Tribunal within 56 days of the final day of employment but including the final day – this can cause some confusion.  If in any doubt please seek legal advice at an early stage.

How Viberts can help

At Viberts we advise employees and employers on all aspects of employment law as well as data protection, personal injury, business licensing, contractual disputes and directors’ duties. We can also provide representation in the Tribunal and Royal Court.

If you have any questions please feel free to contact April Hargreaves in our employment team.