As it was announced that the Marks & Spencer (M&S) store in Basildon could close as part of the company’s bid to modernise its business model, thoughts turned to the 91 employees who could be about to become unemployed.
While M&S confirmed that staff affected would be offered an alternative job, the retailer may have to consider redundancy.
In the simplest terms, redundancy is when an employer reduces their workforce because a job is no longer needed or is expected to “cease or diminish”. Importantly, it can only be considered a redundancy if the worker is not replaced by someone else.
In the M&S case, the store can comfortably make someone redundant as the store will no longer exist, but they must explore all other avenues first – such as finding an alternative placement.
However, it has confirmed that in some cases redundancy will be necessary. Employers can select a worker for redundancy based on their attendance record, disciplinary record, skills or experience, standard of work performance, and general accomplishments in the workplace.
It is important that employees have the opportunity to influence the outcome of the consultation process, rather than proposals being presented to them as a foregone conclusion.
The employer must also open channels for consultation and give employees an appropriate period of time to appeal the decision.
If more than 20, but less than 99 workers, are being made redundant (as seems apparent in the M&S Basildon closure), the consultation period must begin at least 30 days before the first dismissal takes effect.
In instances where more than 100 people must go, the consultation period must begin at least 90 days before the dismissal takes effect.
Staff must also be handed a formal notice of redundancy – the notice period of which will be stated in the employment contract (normally determined by the length of service to the firm).
If staff suspect foul play, employees have the right to take their employer to an employment tribunal.
And finally, employees may be entitled to a statutory redundancy payout, providing they’ve been with the company for more than two years.
If they qualify for payment, they’ll get:
- Half a week’s pay for each full year you were under 22
- One week’s pay for each full year you were 22 or older, but under 41
- One and half week’s pay for each full year you were 41 or older
Anyone affected by the M&S Basildon closure should seek professional legal advice. For more information on redundancy and employment law, contact our employment department here.