Redundancy not child’s play for Kids Company

In early 2015 you may recall hearing about the closure of the charity, Kids Company. This year, Kids Company have hit the news again for reportedly failing to properly carry out redundancies.

Under the Employment Rights Act 1996 an employee who is dismissed shall be taken to be dismissed by reason of redundancy if the dismissal is wholly or mainly attributable to the employer:

  • Ceasing or intending to cease to carry on the business for the purposes of which the employee was employed by it;
  • Ceasing or intending to cease to carry on that business in the place where the employee was employed; and
  • Having a reduced requirement for employees to carry out the work of a particular kind or to do so at the place where the employee was employed to work.

Where a redundancy situation is identified, an employer needs to ensure that the correct procedure is followed and applied fairly.

If an employer is making 20 or more employees redundant over a period of 90 days or less, the procedure becomes more complex as statutory redundancy rules apply. For example, for such cases an employer has a duty to inform and consult appropriate employee representatives and notify the Secretary of State.

A failure to follow the correct procedure may result in a tribunal awarding up to 90 days’ pay in respect of each employee, as was the case for Kids Company.

Dominic Bonham