making employer redundant

My business is suffering from the current financial crisis. I have one employee who I am going to have to let go. He has worked for me for 4 years and 5 months. We have no written contract or terms and conditions of employment in place.

Can you advice what my best course of action should be? Do I need to pay redundancy or give notice? My concern is the that the reason I have to make him redundant is because I will not be able to pay him at the end of February.

Any advice would be appreciated?

many thanks

Yes you have to pay both redundancy (depends on age - 4 - 6 weeks wages) and notice (4 weeks) and you have to pay his wages owed too. Assuming you are a sole trader and not a limited company then if you do not it will cost you considerably more than that - legal fees for the tribunal that you will be taken to, and an award that will be more than you already owe, and then if you do not pay, more court fees, potentially bailiffs fees, and possibly any and all assets you have including your car and home. I would therefore suggest that you cannot afford not to find the money now.

many thanks for your help. I will review my situation and make sure that I have this covered.

Hi i am making an employee redundant who has been on ssp for 6 months now, redunancy is due to a reduction in work and i need to know if i have to redundancy based on the ssp or on normal salary? The employee has work with the company for 2 years.
Thanking you in advance

Before you go rushing off doing this (and it is normal salary) stop and consider how it is going to look, and the fact that such a dismissal may very well be unfair and/or discrimination. Six months is a long period of illness - and that alone tells me that it may now, if it didn't previously, fall into the category of a disability. Selecting someone for redundancy based, very probably, on their sickness absences, where a disability is concerned, is very likely discrimination. Do this without having taken legal advice and being sure you are complying with the law - well, it could cost you a lot more than redundancy pay. If the situation were reversed and this was an employee posting, I would say that they potentially had a claim for unfair dismissal, unfair selection for redundancy and disability discrimination. Of course, on this amount of detail I can't say whether that is the case or not, but equally neither can you!

Thanks for the help it is a little more complex as i have just lost a tender of work and am actually losing 5 people in total including this particulr person due to the loss of such a volume of work. Does this change the situation?

No - with the exception that if you have actually lost a contract then TUPE almost certainly applies and you shouldn't be making anyone redundant, but should be transferring them to the new employer who won the contract. So your headache might have just got bigger.

Go straight to employment specialist lawyers office. You can't afford not to.

Thanks The reason for tender was my supplier has cut the amount of people needed for the work available due to the new way they want things done.

I don't think you are getting my drift here. It doesn't matter why you lost the contract. TUPE quite possibly applies and that means - if it applies it applies. The REASONS you are doing those don't matter. - if TUPE applies both you and the company that won the tender are legally liable.

So far you have suggested making someone who may be protected redundant purely because they are off sick without any clue as to the risk. And clearly without having undertaken a fair and objective redundancy process, presumably, for him or any of the affected staff. And worse, you could be making redundancies as a result of a TUPE, which has its own protections.

Now on these bare details I can't do anything but warn you of the potential risks. Legal fees alone for a discrimination case - £10k up to £24k plus. 4 or 5 unfair dismissal /TUPE claims - £7k absolute minimum EACH, and probably closer to double that. And you pay your legal fees win or lose. Lose and you can add any awards given by the tribunal. By that stage, I reckon you will be out of business? So do you want to get proper legal advice which will be based on full facts, and do this right, and protect yourself? Or not?