Keenan and Riches’BUSINESS LAW

Chapter 16Employing labour

As regards time limits, the employee must make a

written claim to the employer or to an employment

tribunal within six months from the end of the employ-

ment. If the employee does not do this, an employment

tribunal may extend the time for a further six months,

making 12 months in all, but not longer, from the actual

date of termination of the employment, provided that it

can be shown that it is just and equitable having regard

to the reasons put forward by the employee for late

application and to all relevant circumstances.

Amount of redundancy payment

It is necessary to ascertain the amount of a week’s pay.

This amount is whichever is the smaller of the following

amounts:

■the employee’s weekly wage; or

■the sum of (currently) £330.

The redundancy payment then consists of the total of

the following amounts:

■half a week’s pay for each complete year during the

relevant period for which the employee was aged 21

and under;

■one week’s pay for each complete year during the

relevant period for which the employee was aged be-

tween 22 and 40;

■one-and-a-half weeks’ pay for each complete year

during the relevant period for which the employee

was aged 41 or more.

Under the age discrimination regulations, the two-

year qualifying period remains, as does the age-related

multiplier and the maximum of 20 years’ service taken

into account, but there is no lower age of 18 to com-

mence the calculation and the upper age limit of 65 is

removed. Service under age 18 will now count. The

former reduction by one-twelfth where the employee is

over 64 is also removed.

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to be a loss of status. In that case the manager of a Co-op
mobile butcher’s shop was offered a post in the butch-
ers’ section of a Co-op supermarket, which he refused to
accept because he was under another manager, which
he felt, quite reasonably, involved a loss of status. He
was successful in his claim for a redundancy payment.

(iii)In Fisherv Hoopoe Finance Ltd(2005) the EAT
ruled that offers of alternative employment are ineffect-
ive unless information is given regarding wages or salary
of the post(s) involved. Mr Fisher was employed by
Hoopoe as a new business manager. He was later made
redundant and as a consequence brought a claim for
unfair dismissal on the basis that Hoopoe had failed to
take sufficient and appropriate steps to bring the pos-
sibility of suitable alternative employment to his notice.
He also alleged that Hoopoe had promised him a new
role or to retain his existing role.
The tribunal dismissed his claim and he appealed to
the EAT, which ruled that:

■As regards the promise to offer a new role or to retain
the existing one, the tribunal had accepted the evid-
ence of Hoopoe’s witnesses that the promise was not
made and not raised by Mr Fisher at any stage before
his dismissal. The EAT found that there was clear
evidence that Mr Fisher had raised the matter of the
promise before his dismissal and that the tribunal’s
reasons for preferring the Hoopoe witnesses’ evidence
were fallacious and amounted to an error in law.
■As regards the offer of alternative employment, the
tribunal had misdirected itself in regard to this. Mr
Fisher was given a list of alternative roles but none of
the written correspondence between the parties gave
details as to financial prospects, including the fact
that one of the posts, i.e. field-based sales account
manager, carried a similar annual salary. There was no
evidence as to why this information was not available.
■The decision of the tribunal did not give written rea-
sons, so it did not comply with rule 30(6) of Sch 1 to
the Employment Tribunals (Constitution and Rules of
Procedure) Regulations 2004 (SI 2004/1861) on writ-
ten reasons for a judgment and relevant case law. The
tribunal’s decision consequently amounted to an error
in law.

Mr Fisher’s appeal was allowed and his claim was remit-
ted back for hearing by a freshly constituted tribunal.
This ruling is a reminder to employers to give as much
information as they can about suitable alternative em-
ployment, including, preferably, written notification as to
remuneration. Basically, sufficient information must be
given to allow the employee to decide whether to accept
or reject the new employment.

Example

A man of 52 who is made redundant having been con-

tinuously employed for 18 years and earning £280 per

week as gross salary at the time of his redundancy would

be entitled to a redundancy payment as follows:

34 to 41 years =7 years at one =7 weeks

week’s pay