CHAPTER 15 Unfair dismissal and redundancy claims. Unfair dismissal and redundancy claims. Overview This section looks at the rules about making a claim for unfair dismissal or a redundancy payment.
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Unfair dismissal and redundancy claims
This section looks at the rules about making a claim for unfair dismissal or a redundancy payment.
Complaints of unfair dismissal must normally arrive at an employment tribunal within three months of the effective date of termination.
Sickness may be taken into account but will be more important if it is in the latter part of the three-month period than at the beginning.
Employees who have not received a redundancy payment will normally be entitled to make a claim only if within six months of the relevant date they have:
ACAS will assist the employee and the employer by conciliating to try to reach an agreement to settle the complaint. Copies of unfair dismissal applications and redundancy claims and subsequent correspondence are sent to an ACAS conciliation officer who has the duty to promote a settlement of the complaint
Remedies for unfair dismissal include:
Tribunals have the power to order reinstatement or re engagement. They must ask employees if they wish an order to be made, and can only make one if so requested. If no order is made, the tribunal must turn to the question of compensation.
Where re-employment is sought, a tribunal must first consider whether reinstatement is appropriate and, in so doing, must take into account the following matters:
Reinstatement is defined as treating the complainant ‘in all respects as if he had not been dismissed’.
The tribunal may order re-engagement and decide the terms, including the identity of the employer, the nature of the employment and the remuneration payable.
Compensation for unfair dismissal usually consists of a basic award and a compensatory award.
The basic award is calculated in the same way as a redundancy payment, and will be reduced by the amount of any redundancy payment received. Where the dismissal is related to union membership or the employee’s health and safety responsibilities, there is a minimum award in 2009 of £4,700.
The compensatory award is an amount which a tribunal ‘considers just and equitable in all the circumstances having regard to the loss sustained by the complainant in consequence of the dismissal insofar as that loss is attributable to action taken by the employer’.
The maximum compensatory award in 2009 is £66,200 and is linked to the retail price index.
The size of a redundancy payment depends upon the employee’s age, length of service and the amount of a week’s pay.
Redundancy payments are calculated according to a formula, with a maximum of 20 years’ service being taken into account. Starting at the end of the employee’s period of service and calculating backwards:
Thus the maximum statutory redundancy payment in 2009 is £10,500 (ie 30 x £350).
Employee rights on insolvency
If an employer becomes insolvent or bankrupt, an employee’s wages in respect of the four months beforehand, up to a maximum of £800, become a preferential debt.
With regard to these circumstances Schedule 6 of the Insolvency Act 1986 treats the following as wages:
Section 182 ERA 1996 gives employees the right to make a written request to the Secretary of State for a payment out of the National Insurance fund to meet certain other debts which arise out of the employer’s insolvency.
These debts are: