Cancelling Contracts and Redundancy

In the current economic climate, cancelling contracts and redundancy are unfortunate but act as a foreseeable decision for the business. There are mainly two types of redundancy: voluntary and compulsory. In voluntary the employees can volunteer for the redundancy but in the compulsory redundancy the decision is in the hands pf the employer. There are many factors that have to be taken into account before the decision of cancelling contracts is taken. The most important one is redundancy pay that is if the contract is being cancelled then the employees have to be paid with certain amount of redundancy. For this, there should be correct facts, figures and documentation so that you can pay accordingly.

Cancelling contracts is a very big deal so first the alternatives should be given a thought. There can be many of the alternatives a company can think like cost cutting with the help of putting a stop on the over time option and also reducing the working hours of the employees. A company can stop the recruitment programs instead they can use the current employees in a far better way. You will find that the employees will be happier to work more than to lose their job.

If the employees have worked for at least two years or they are on the fixed term contract then they have the right too claim for redundancy. An employer is liable to pay redundancy if he makes someone redundant.  But if the employee has resigned or the fixed term of his employment came to an end then he is not eligible for redundancy. Even is the employer offers an alternative work to the employee within a rational difference then he does not have to pay the redundancy.

There are different factors which can affect the redundancy that is being paid to the employees, these factors are very important to be included in the redundancy procedure to be taken out in a legal way. The factors that effect the total amount and which should be included in the procedure is the time period they have been working for, their age and the weekly wage they have been paid. There is a particular law limit of cancelling contracts and redundancy like the employee has to be awarded with half a week’s pay for each complete year if they are below the age of 22. If the employee falls under the age group of 22 to 40 then the company has to pay full week’s pay to them for each complete year of the continuous service and if the employee exceeds the age of 41 then he has to be paid with a week and a half’s pay.