Hearing you’re going to be made redundant is a stressful and worrying time. We help you understand the facts, what you’re entitled to and what happens during the redundancy process.
What does redundancy mean?
Redundancy is a form of dismissal from your job due to your employer needing to reduce their workforce and your job no longer being needed. This could be because the business is changing what it does, moving somewhere else, changing how they work (such as using new machinery or technology), or closing part of all of the business.
What are my rights if I’m made redundant?
You have certain legal rights if you’re legally classed as an employee and have worked for your employer for at least 2 years. These rights don’t change during the coronavirus pandemic, although it could be that your employer can re-employ you under the Job Retention scheme.
Your employer must have chosen to make you redundant via a fair selection process. This means grouping together employees who are at risk of redundancy using agreed criteria. For example, this could be because of your level of experience or capability to do your job.
You can’t be chosen based on any criteria that directly or indirectly discriminates against you. This includes your age, disability, gender reassignment, marriage or civil partnership status, pregnancy or maternity leave, race, religion, sex, sexual orientation or because you’re part of a trade union for example.
What is voluntary redundancy?
Voluntary redundancy is when you find out your employer is planning to make redundancies and you put yourself forward voluntarily to be selected. Usually this is done once your employer has asked for volunteers, but you can offer directly.
To do so, you should put your request in writing and follow the company’s policy for voluntary redundancy if they have one. Your employer doesn’t have to grant your request and they may even prefer to keep you on. Nor do they have to offer voluntary redundancy to everyone.
Do I have a say?
Yes. It’s a legal requirement for your employer to consult with you if they’re planning on making redundancies, even if you’re not at risk directly. Usually, you’ll be invited to a meeting with your line manager or HR – this may be in person or remotely – but they must do so at least once. That way they can make sure they are listening to and responding to your suggestions and requests.
During this meeting, you have the opportunity to talk to your employer about the planned changes and why you’ve been selected for redundancy. You should try to find out the selection criteria, raise any concerns you have and even discuss your ideas for ways to avoid the redundancies altogether. You may want to request time off to look for a new job or do some training, or to find out the business’ for the future in case another opportunity may come up.
Your employment does not have to implement the changes you request, but they do have to show that they’ve listened to you and tried to consider your suggestions. You can also appeal against the redundancy decision if you feel you haven’t been treated fairly.
What is ‘collective redundancy’?
Collective redundancy is when an employer is making more than 20 people redundant at the same time (or within 90 days) at the same workplace. There are different rules for collective redundancy that they are legally required to follow – for example, consulting with employee representatives or trade unions. However, your employer must still talk to you individually.
Before being represented by either an employee representative or trade union, they should also meet with you to share information about the redundancy process, ask for your views and opinions to work out a collective staff response and engage you in open discussions. They have to solve problems and reach agreements before telling you the outcome of the consultation process.
What am I entitled to?
When you’re being made redundant, you’re entitled to certain things such as redundancy pay, a notice period and time off to find a new job.
How much redundancy pay you’ll receive depends on your age and how long you’ve worked for your employer. However you might get more than the statutory minimum if it’s written in your contract of employment.
Redundancy pay is worked out based on your earnings before tax (gross pay), the years you’ve worked for your employer and your age. Weekly pay calculations should also take into account regular overtime (if your contract says you must be paid it) and any bonuses or commission.
Your employer must tell you in writing how your redundancy pay has been calculated and when you will receive it. Up to £30,00 redundancy pay is tax free. There are limitations on the maximum amount of redundancy pay you can receive. There are also different ways to calculate your redundancy pay if you’ve been on furlough.
What is my redundancy notice?
When being made redundant, your employer has a legal obligation to tell you your notice period and keep paying you until you leave your job. These details should be communicated to you in writing.
How much redundancy notice you get depends on how long you’ve worked these. You’re entitled to statutory notice if you’ve been employer for more than a month, but your employer can choose to give you longer if it’s written into your contract.
The statutory minimum is:
If you work during your notice period, you’re entitled to the same pay for doing so as you’d normally receive. However, you may be offered ‘payment in lieu of notice’ (PILON) which means you get paid instead of working your notice period.