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My job’s gone but my boss won’t pay me off

Posted on Jun 13, 2014 By In The Expert View

Duncan McFadzean, director of ELP Arbuthnott McClanachan and a member of United Employment Lawyers, raises the thorny case of what an employee can do when their employer won’t make them redundant.

Most employees do not really want to lose their jobs. But what if your role at work is changed beyond all recognition or even disappears? It isn’t the job you applied to undertake, yet your employer simply refuses to make you redundant.

 This is a rather difficult situation. Surely if your job no longer exists then you are made redundant? Unfortunately, it’s not as simple.

There are some situations when a small employer, who is struggling financially, cannot find the cash to pay a long served employee statutory notice and redundancy pay. The costs might run into the tens of thousands of pounds.

What about an employer, usually a larger one, who has an enhanced redundancy scheme where employees are entitled to several times statutory redundancy entitlements. Often this is with no cap on the value of a week’s wage or length of service. Again, this can cost tens of thousands of pounds.

The employer may not want to pay for financial reasons, may feel that the employee ‘doesn’t deserve it’, or may simply want to force the employee into another role in the workplace.

Our employment law team have seen this happen many times in recent years.

So what can an employee do? A traditional answer might be that ‘you can’t force your employer to make you redundant’. This is not the whole story.

Depending on the terms of the employment contract relating to the employee’s role (including flexibility and mobility clauses), if the employer changes the role to a material extent without the employee’s agreement then the employee may be in a position to resign and claim constructive unfair dismissal.

The employee may ask ‘does that mean I get my redundancy pay?’ The answer to this is not straightforward. A successful employee may be awarded a basic award by the Employment Tribunal equivalent to statutory redundancy pay, but more valuable enhanced redundancy pay would only be awarded as compensation if the Tribunal was convinced that had it not been for the constructive dismissal the employee would have been made redundant properly. It is certainly possible to win that argument, but it will not follow automatically, and we have seen Employment Judges warn employees that they cannot assume this argument will always work.

That said, constructive dismissal is not the only possible claim here, and indeed in some cases we would view it as a fall-back position. A better argument (where the facts fit) can be that by changing the employee’s role unilaterally the employer has actually dismissed the employee as a matter of law, and this argument can work even if the employee has continued on the payroll for a period.

One attraction of this approach is that it can allow the employee to argue that not only have they been dismissed, but they have been dismissed for reason of redundancy. If this is accepted then they will be contractually entitled to their enhanced redundancy pay. Depending on the value of this, an order for payment of the redundancy pay can then be sought from the Employment Tribunal or Sheriff Court.

There are of course other aspects to these cases, and our employment law solicitors are experienced in analysing each case on its merits, negotiating with employers, and representing clients before the Employment Tribunal and Sheriff Court. We have recently had particular success in persuading an employer to pay very substantial compensation to employees who had been moved into a new role which the employer claimed was suitable and the employees claimed was not. We had to embark on Employment Tribunal proceedings to achieve this, but it was very much worth it.

Duncan McFadzean is Director of ELP Arbuthnott McClanachan Employment Law Practice, 98-99 Ferry Road, Edinburgh, EH6 4PG. You can contact him on 0131 554 8649.