Last reviewed 17 February 2016
In broad terms, for the recipient at least, there is something very final about redundancy. While it in no way should reflect on the stage of life or stage of career of the individual, it can feel like it could be the end of the working life. For the company carrying out redundancies because of reducing economic viability, it can seem like a mark of failure. Dismissal, on the other hand, should place the burden of responsibility far more on the shoulders of the employee concerned, the blame may indeed lie firmly with them. In practice, however, are the lines between redundancy and dismissal increasingly blurred asks Gudrun Limbrick.
In legal terms, it is very important for employers to find these blurred lines between redundancy and dismissal and to ensure that they are sitting on the right side of them. If they are not clear, and thus take the wrong steps, they could leave themselves vulnerable to being taken to employment tribunal by the individual or individuals affected.
Legally, redundancy is a form of dismissal. In practical terms, in both instances, of course, the individual concerned ends up without the job. That is what the two actions have in common.
In terms of what is different between dismissal and redundancy, the key element is that, in redundancy, the person not only loses his or her job but the job itself disappears too. A redundancy is not a redundancy if the same job exists afterwards. Additionally, a strict process of making a person, or group of people, redundant has to exist for the dismissal to be legally considered a redundancy.
Those with employment rights (generally those working under contract for more than two years with the employer) must be given a notice period, consultation about what is going in with their employer and the option to move into other jobs available within the company. If these elements are not carried out, the employee may have a case against the employer to take to employment tribunal.
In dismissal, depending on the nature of the grievance against the employee and the terms of the employment contract, an individual can be sacked with no notice at all. The employer must, however, have a valid reason for dismissal that can be justified, and the employer must be able to demonstrate that they acted reasonably in the circumstances. Actions must include an investigation of the grievance against the employee so that they can be confident that the dismissal is justified. For example, if dismissal is based on a complaint made against an employee, an investigation must have taken place into the truth or otherwise of that complaint.
One thing that an employer must do is to treat all the employees fairly. Thus, one individual cannot be dismissed for an action, when another individual, committing the same action, was not dismissed. If two employees have identically poor punctuality/attendance records, either both must be dismissed or neither must be. Likewise, the judgment as to which employees are to be made redundant cannot be based on such issues as gender, age, disability or being on maternity leave. Fairness is a strong concept that employers have a duty to uphold.
There is a grey area in these definitions. When a company is deciding upon which members of staff to make redundant (if, for example, they can only afford to keep on 10 out of 15 call centre workers), they can take into account issues that may equally have formed the basis for a dismissal, for example, punctuality and absenteeism, and their disciplinary record.
It is thus perhaps possible that an employer could choose, in a time of low revenue, to make a troublesome individual redundant (over other members of the call centre team who had better records), only appointing, in this case, more call centre workers, when business is better, rather than dismissing the individual for their misdemeanours. This may be considered as easier, and letting them down more gently than a straightforward dismissal.
However, is redundancy really a “kinder” option? Of course, redundancy can bring with it statutory redundancy payment although the amount is, of course, completely dependent on the length of time worked. On the other hand, redundancy can carry a stigma, leaving individuals fearing that they have reached the end of their useful working life.
However, being dismissed for not being any good at a job, or having poor punctuality and the like, also carries with it a stigma. It may be tricky to explain to another potential employer that it is not a reflection on how the individual will fare in new employment.
For the employer, there is not a “safer” option of dismissal, ie an option that is going to make being taken to employment tribunal less likely. In both instances, employers have to be sure they have followed the legal process and the terms of their own employment contracts. It certainly is not better for public relations to make someone redundant rather than dismiss them for legitimate reasons. In fact, redundancy can make people question a company’s economic viability and business skills, while they might appreciate swift and decisive action being taken against an employee who is not giving their all in a job or who has behaved badly.
It could be said that the risk of legal comeuppance for an employer who chooses not to take the right steps when dismissing an employee (whether dismissal by redundancy or any other form of dismissal) is lower now than it has been. Not only do employees have reduced rights when they have been in employment for less than two years, but flexible arrangements (such as zero-hours contracts) are more common, in which dismissal could, theoretically, simply be a case of not offering an individual any more paid hours. Additionally, in 2013, new charges for employment tribunals were brought in so that a fee of £160 or £250 must be paid by the individual before the employment tribunal begins and a further payment of £230 or £950 for the tribunal hearing itself. While the statistics about the fall in tribunals resulting from these measures are still being debated, it seems reasonable to think that some employees will be put off taking their employer to tribunal unless they are very confident of getting a return on their investment. Is it possible that employers will become more relaxed in their approach with less to fear from legal comebacks?
For individuals, any form of dismissal can be a daunting prospect, whether or not they have contributed to their own demise through deliberate wrong-doing. Even where it is not a legal responsibility, it generally makes for an easier life if the employer “softens the blow” and eases the individual into their new unemployed status. This includes having good communication about what is happening, signposting the individual to support and information networks and, when working through any notice period, giving help in getting new work, including time off for applications and interviews. Losing an individual, for whatever reason, can be stressful and disconcerting for a team, easing the individual through the process can help morale in the longer term.