The following Employment Tax guidance note Produced by Tolley in association with Jessica Shemmings at Charles Russell Speechlys LLP provides comprehensive and up to date tax information covering:
An individual redundancy is a dismissal that can be attributed wholly or mainly to a situation in which:
the employer has ceased to carry on the business for the purpose of which the employee was employed (ie a business closure)
the employer has ceased to carry on the business in the place where the employee was employed (ie a workplace closure)
the requirement of that business for employees to carry out work of a particular kind, or for employees to carry out work of a particular kind in the place where the employee was employed have ceased or diminished (ie reduced requirement for work)
‘Ceased’ as well as ‘ceased or diminished’ also includes scenarios in which the employer intends or expects for the business or work carried out to cease or diminish. This permits employers to plan for changes to their business operations and work force in an organised fashion.
If there is an issue about the place where the employee works, this means the place where he works as a matter of fact, not the places where he could have been asked to work under his contract of employment.
If the employer proposes to make 20 or more employees redundant within a 90 day period, the rules on collective redundancy are also likely to apply, regardless of whether or not such employees are spread across different offices or sites. For further information on collective redundancy, see the Collective redundancy ― overview and Information and consultation in collective redundancy guidance notes.
Once an employer has determined that it is facing a redundancy scenario, a specific procedure needs to be followed. Redundancy is a potentially fair reason for dismissal; however, dismissal for redundancy will be unfair (for employees with at least two years’ service) unless the employer follows a fair dismissal procedure. See the Unfair dismissal guidance note. This procedure can be summarised as follows:
establish which employees are at risk of redundancy
identify fair selection
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