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Redundancy guide for employees

View profile for Philip Richardson
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Redundancy guide for employees

Facing redundancy at work can be a daunting and stressful prospect. However, you are not alone; the latest figures show that 96,000 people were made redundant in 2018 in the UK alone. No matter where you work or in what industry you work in, your employer will have to follow a fair and reasonable process (as long as you qualify for redundancy rights). The exact process will depend, to some extent, on the number of employees that are being made redundant and how long an employee has been at the company.  

If you are facing redundancy at work, we offer redundancy advice for employees; or, if you think you have been dismissed unfairly or your employer has not followed a fair and reasonable redundancy procedure, contact our expert redundancy solicitors today.

Employment law: redundancy

When it comes to employment law, redundancy rights and what you are entitled to, it will depend on your employment status, how long you have worked for your employer and your age.

You will only be eligible for redundancy rights and redundancy pay if you are legally classed as an employee and you have worked continuously for this employer for at least two years. If you are classed as a worker, you are not normally entitled to statutory redundancy pay, nor protection from unfair dismissal.

Redundancy pay

Depending on your contract, you may be entitled to more than statutory redundancy pay, so make sure you check your contract before you agree to any redundancy terms. As long as you qualify for redundancy rights, you will get some redundancy pay. There are three main factors used to determine how much you will get when you are made redundant:

  • Your age
  • The number of years you have worked for your employer
  • Your earnings before tax (also known as gross pay)

Your employer must tell you how your redundancy payments will be worked out, when you will get your redundancy pay and how you will be paid. However, if your employer has offered you a suitable alternative job within the business and you refuse to take it, you may not be able to get any form of statutory redundancy pay. The first £30,000 of a non-contractual redundancy payment you receive is tax-free.

Your age and how long you have worked at a company have the biggest impact on most people's redundancy payout:

  • If you are aged under 22, your employer only has to give you half a week’s pay for each full year you’ve worked for your employer
  • If you are aged between 22-40, your employer must give you one week's pay for each full year you have worked after you reached the age of 22. If you worked for your employer when you were aged 22 or under, you will only receive half a week's pay for each full year of that time period
  • If you are aged 41 or over, you will be entitled to 1.5 week’s pay for each full year you have worked after you reached this age bracket. If you worked for your employer when you were aged between 22-41, you will only get one week’s pay for those years of service

There is, however, a cap of £15,750 on how much statutory redundancy pay you will get, regardless of your length of service or your salary level. The cap for weekly pay is currently £525, or £500 in Northern Ireland.

How does redundancy work?

While there are some legal requirements that your employer must follow, every company will have its own redundancy procedure, which generally can be found in your company’s handbook. However, some companies, especially smaller ones, may not have a redundancy policy.

You can only be made redundant for three reasons:

  • Where a business is closing entirely
  • Where the location an employee works is to be relocated
  • Where the specific work that an employee carries out is no longer required

If you are faced with redundancy for any of the above reasons, there are some basic legal requirements that companies must adhere to, which are:

An employer must use a fair and objective way of selecting who is going to be made redundant and they must tell you what it is

You are entitled to a minimum notice period, how long this will be will depend on how long you have worked for your employer and the terms of your employment contract

Employers must consult with employees before making them redundant and as part of this consultation, the employers have to consider alternatives to redundancy, how to try to reduce the numbers of redundancies and how they can reduce hardship. The specific rules around consultation will depend on how many employees are being made redundant

If you are being made redundant, you have the right to time off to look for work and, depending how much time you take off, you have the right to be paid for it.

If your employer has not followed the correct redundancy procedure, then it may be possible to make a claim for unfair dismissal. Our redundancy lawyers offer redundancy advice for employees; contact us to discuss your case.

Redundancy claim

As an employee who has redundancy rights, you can make a claim against your employer if you think you have been unfairly made redundant or your employer’s process has not been fair and reasonable.

Other reasons where your redundancy could have been unfair include:

  • You are not met individually by your employer or they only meet you to tell you they are making you redundant (If you have worked for your current employer for two years or more)
  • You have not been given enough information about the process
  • The process was not followed properly
  • Your redundancy selection is a result of some form of discrimination (i.e. age, sex, religion, gender, race, maternity discrimination etc)
  • If you do not believe that the redundancy situation was genuine and that your job is still required by the employer.

If you think you have been unfairly dismissed, then contact our redundancy solicitors today on 01616 966 229. They will listen to your situation and can help you determine if you have a claim.