Lawyers Adam Rice and Anna West answer eight frequently asked questions
Job security remains a key concern for pharmacists, the C+D Salary Survey indicated earlier this year. And, according to the Chartered Institute of Personnel and Development, redundancies remain on the cards for many into 2011. Here's what you need to know if the worst happens.
Q I suspect my company wants to make me redundant and then replace me in a few months. Can they do this?
If the company intends to replace you, then it means you are not really redundant. Labelling a dismissal as a redundancy when in reality it is for another reason will make your dismissal unfair. If you have been unfairly dismissed you could claim compensation for your losses up to a maximum of around £70,000.
Q I have been selected for redundancy and have applied for an internal vacancy, but the company seems to prefer to recruit externally. Can they
do this?
If the role is a suitable alternative for you, ie a role at a similar level that you are capable of doing, then the opportunity should be offered to you ahead of an external candidate. Failure to do so is likely to lead to a successful unfair dismissal claim.
They should only seek an external candidate if you, or any of your redundant colleagues, are not competent to fill the role.
Q Can the company take my attendance into account when deciding who should be made redundant?
If you have had periods of sickness absence due to a disability, you could have a claim for disability discrimination if these absences are taken into account.
In this context, a disability is a long-term illness (ie lasting or expected to last for at least a year) which significantly impacts on your day-to-day life.
Similarly, if you have been absent for reasons relating to pregnancy or childcare, you may have a claim for sex discrimination if these absences are taken into account.
Q Can the company use length of service when deciding who will be made redundant?
Using length of service (eg 'last in, first out') is likely to amount to indirect age discrimination as it favours longer-serving employees, who are usually older.
However, it can be lawful for the company if they can justify this by showing that it has a legitimate purpose, such as rewarding loyalty or retaining business-specific experience, and there is no less discriminatory way of achieving that aim.
Length of service is more likely to be lawful when used as one of a number of criteria, or even as a 'tie-breaker', rather than as the sole criterion.
Q The company went through a scoring process to decide who should be made redundant. Can I ask the company to show me my teammates' scores?
You are entitled to see your own scores as part of a fair redundancy process. While you are not strictly entitled to see the scores of your colleagues, a failure to hand them over could convert the redundancy into an unfair dismissal.
However, this needs to be done anonymously to protect the privacy of other staff. The company might be justified in withholding the scores if they think the identity of the other employees would still be obvious to you.
Q I have been with the company just short of two years and am being made redundant. Is it true that the company doesn't have to pay me anything?
Employees are only entitled to a statutory redundancy payment if they have two years continuous service. If you have worked for the company in another branch or part of a group, this will usually count.
While you might not be entitled to a statutory payment, you might be entitled to an enhanced redundancy payment under your employment contract or your company's redundancy policy, so it is worth checking this.
Q I have just told my manager that I am pregnant. Does this mean that I cannot be included in a redundancy process?
Sadly, no - you can still be selected for redundancy, as long as the reason for your selection is not related to your pregnancy, future maternity leave or childcare responsibilities.
If it is, then this will amount to sex discrimination - for which you could claim unlimited compensation for your losses (based on the time it takes to find a new job) and also compensation for injury to feelings of up to £25,000.
Q Will my redundancy payment be taxed?
Payments of up to £30,000 made genuinely on account of redundancy will be free of tax; and the entire amount, even if it is above £30,000, will be free of national insurance contributions.
It is common, however, for the overall redundancy package to include a component for payment in lieu of notice (PILON), which would be taxed differently.
A PILON will usually be subject to PAYE tax and national insurance contributions in the usual way. This would be the case if there were a clause in an employment contract that allowed the company to make such a payment instead of giving notice.
Even if the PILON is taxable, any separate amount that is paid for redundancy, including any statutory or enhanced redundancy pay, should come under the £30,000 tax-favourable regime.
Adam Rice and Anna West are employment law specialists at solicitors Travers Smith LLP