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Employee Rights in London and the United Kingdom

Changes to Contracts of Employment	Redundancy
Redundancy Payment Entitlements	Redundancy Payment Amounts
Continuous Service Calculation	The definition of a week’s pay
Time Limits for Redundancy Claims	Time off for training/looking for another job

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Contracts of Employment

Changes to Contracts of Employment

What if an employer changes my contract of employment without my knowledge or consent?

• If an employer makes and imposes changes to any of the terms of your contract of employment it is regarded as breach of contract.
  
• If the breach is a fundamental one (which means it is significant and affects your pay, working conditions, or the working relationship) employees are able to resign and claim constructive dismissal (felt forced to resign).
  
• If you are dismissed by an employer and have one or more years of continuous service with the employer you will be able to make a claim of unfair dismissal at an employment tribunal.
  
• If the breach of contract has caused you measurable financial loss (which means you can prove how much it has cost you in terms of lost earnings or benefits) than you are able to sue for damages.
  
• Claims at an employment tribunal must normally be made within 3 months from the date of the end of the employment but those made at a court can be made up to 6 years from the date of the alleged breach of contract.
  
• If you cannot prove financial damages employers may still at least be instructed to abide by the terms of the original contract.

Redundancy

Redundancy occurs when an employer terminates an employee’s contract of employment due to the employee’s position and job role becoming obsolete. It may occur when an employer:

• needs to make a reduction in his or her workforce;
  
• is taken over by another company leaving a duplication of job titles between the two companies;
  
• closes down or ceases some of its operations.

The termination of your employment cannot be regarded as a redundancy if your employer immediately hires another person to fill your existing role, but a redundancy can occur even if the employer is recruiting for new employees in other areas of the business or to work in another location (such as the outsourcing of operations to China or India). If you are made redundant due to the need for a reduction in the workforce and another employee takes on your duties, you will still qualify for a redundancy payment as long as no vacancy exists in the exact area of your previous position (full duties, responsibilities, and location of your job).

Redundancy Payment Entitlements

You must normally have had at least 2 years of continuous service with your employer to qualify for a redundancy payment. You will probably not qualify for a payment if you have been offered another suitable alternative job with the same employer, an associated employer, or an employer who takes over the business for which you previously worked. These offers, however, need to be made before your existing contract of employment comes to an end and the new job will need to begin within 4 weeks of your previous employment contract drawing to a close.

If you regard the new job offer as unsuitable (because of possible differences in terms of employment, capacity, or location) you may turn it down within a 4 week trial period of starting the new job (this trial period can be extended by written agreement between both parties if training is required) and you will be considered to have been made redundant from the date your original contract of employment came to an end.

If yourself or your employer reach any disagreement as to whether or not you are entitled to a redundancy payment (or the amount) you will need to apply to an employment tribunal to present your case. If the employing body claims that it is unable to afford to pay you a redundancy payment because it has become insolvent then you will normally be able to claim the monies due from the Redundancy Payments Office (which, in turn, will take back the payment amount from the assets of the business). In this case, ask the employer’s representative (liquidator, trustee, etc) for the claim form “RP1” which you will need to fill out as soon as possible after your employment has come to an end, and send it to the Redundancy Payments Office.

Employees who have no right to a redundancy payment include:

• Members of the Armed Forces.
  
• Staff of the House of Lords or the House of Commons.
  
• Apprentices whose services are contracted to end.
  
• Domestic servants in a private home who are also members of the employer’s immediate family.
  
• Share fisherman who are paid from a share of the proceeds of the catch.
  
• Crown servants or employees in a public office.
  
• Employees of the Government of an overseas territory.
  
• Employees at the end of a fixed term contract which was agreed, renewed, or extended before 1 October 2002 and lasts for at least 2 years, were they have already given written agreement to waive their redundancy payment entitlement at the end of the contract (this does not apply to such employees whose fixed-term contracts were agreed, renewed, or extended after 1 October 2002).

Redundancy Payment Amounts

The lumps-sum that you are entitled to receive as your redundancy payment depends on:

• Your length of continuous service with the employer.
  
• The relation of your continuous length of service to a particular age band and your weekly pay.

Redundancy payment entitlements are calculated as follows in order for them to comply with the law:

• At least 0.5 week’s pay for each full year of continuous service where the employee’s age during these years has been less than 22 years old;
  
• At least 1 week’s pay for each full year of continuous service where the employee’s age during these years has been between 22 and 41 years old;
  
• At least 1.5 week’s pay for each full year of continuous service where the employee’s age during these years has been above 41 years of age.

Continuous Service Calculation

In order to work out exactly how much you are owed by your employer, you will need to know exactly what length of continuous service with the employer you are able to claim. The maximum number of years that can be counted for your redundancy payment as continuous service is 20 years. The length of continuous service is counted backwards from the date that your period of notice ends, or the date that it should have ended in terms of statutory legal requirements or your contract of employment.

Any legitimate absences from work during the period that you are claiming continuous service (sickness or maternity/paternity leave, etc) are still able to be counted towards your period of continuous service. However, any days that were lost due to you taking part in any industrial dispute (strike) need to be removed from the total length of continuous service.

The definition of a week’s pay
A week’s pay is what you are entitled to receive under the current terms of your employment contract on the “calculation date” which is:

• The date you were given notice of the redundancy (the minimum notice you are entitled to receive under law is one week’s notice for each year of continuous service up to a maximum of 12 weeks).
  
• The date on which minimum notice would have had to be given to you to end your employment on the date it actually ended (if your notice was longer than the statutory minimum).
  
• The date your job actually ended if you weren't given notice or enough notice.

A week’s pay is what you were entitled to receive in remuneration for a week’s work on the “calculation date” in terms of your wages or salary (overtime earnings are not included unless overtime was part of your normal working hours).

If your weekly earnings fluctuated as a result of piecework (being paid per article of work produced) or productivity bonus arrangements (getting paid for performance) then your week’s pay is worked out by simply multiplying the number of hours normally worked in a average week by the average hourly earnings worked out over a period of 12 complete weeks of work before the “calculation date”. Only the hours that are actually worked are taken into account and any hours included in the calculation that are worked outside normal working hours at higher rates are regarded as per the standard rate.

If your weekly earnings fluctuated as a result of shift work then the same calculation as above is performed except that the average hourly earnings are multiplied by the average weekly hours over the same 12 week period. In situations where the employee has no fixed working hours than his or her week’s pay will be the average weekly earnings in the 12 weeks before the calculation date. The week’s pay amount is limited in line with the retail prices index (and may move up or down). The current weekly limit is £330.

Time Limits for Redundancy Claims

If your employer will not pay you and you believe that you are entitled to receive a redundancy payment then you have to either write to the employer outlining your case for payment and/or take the matter up with an employment tribunal within 6 months of the date that your employment ended or you may lose the right to receive a redundancy payment altogether.

Time off for training or to look for another job

Any employee given notice of a forthcoming redundancy is entitled to take reasonable time-off with pay during normal working hours to look for another job or make arrangements for future training. Only employees with 2 year’s continuous service on the date their notice expires or the date when the statutory minimum notice period expires are entitled to time off in this way. The maximum an employer is required to pay for time-off in this way is two-fifths of a week’s pay, regardless of the length of time that is allowed.

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