Everything you need to know about redundancy

Published: 09 Mar 2018

Whether you welcome your redundancy or not, you’ll want to be sure you’re getting a fair deal. Knowing your rights and what you’re entitled to will help.


What is redundancy?

Redundancies happen when an employer needs to reduce its numbers, usually either to save money or avoid collapse.

If it happens to you, you might be entitled to:

-  redundancy payments

-  a notice period

-  consultation with your employer

-  time off to look for a new job

-  the option to move into another job.

There also has to be a fair and objective reason for your employer’s decision. That might be:

- your disciplinary record

- the fact you were the last person to be hired

- you don’t have the right skills, qualifications and experience

- you’ve chosen to take voluntary redundancy.

There’s one exception: your employer doesn’t need to give you a reason if your role ceases to exist (usually because they’ve shut down an entire part of the business).  

Your redundancy rights

Knowing the rights you have under redundancy law means you can make sure you’re getting a fair deal.


Reapplying for your own job

If you get a chance to reapply, you’ll want to prepare yourself for the interview questions beforehand.

If you choose not to reapply or you do and it doesn’t work out, you’ll still have a job until your employer formerly says they’ve made you redundant.

At that point, they should explain your rights to redundancy pay, a redundancy notice period and a consultation – but that all depends on your employment terms.

Being dismissed unfairly

No organisation can make you redundant because of your:

-  age

-  disability

-  pregnancy

-  marital status

-  race

-  religion

-  sex

-  sexual orientation.

Nor can they make you redundant because you’ve:

-  become a trustee of a company pension scheme

-  changed something to help the company comply with regulations

- exercised your statutory rights

- gone on jury service

- gone on maternity or paternity leave

- got a certain working pattern (like going part-time or being on a fixed-term contract)

- joined (or not joined) a trade union

- reported something illegal that they’ve done.

If you think you’re being made redundant unfairly, write to your employer explaining your reasons. You might also be able to go to an employment tribunal and make a claim for unfair dismissal.


Taking voluntary redundancy

If an employer chooses to offer voluntary redundancy, they have to offer it to everyone. So not just people who are eligible for early retirement packages, for example.

If you want to go for it, your employer will have their own process you’ll need to follow.


Redundancy pay and statutory redundancy

You can usually get statutory redundancy pay if you’ve been in your job for more than two years.

Normally your employer will work out how much to pay you based on how long you’ve worked for them, your age and your weekly pay.

What you’ll get

The easiest way to find out is to use a pay calculator, like this one on gov.uk.

Here are the workings:

- Half a week’s pay for every full year you worked before turning 22.

- One week’s pay for every full year you worked between 22 and 40.

- One-and-a-half weeks’ pay for every full year you worked after turning 41.

The length of service is capped at 20 years, so if you’ve been in your job for longer than that you won’t get any more money for the extra years.

If you were made redundant after the 6th April 2017, your weekly statutory pay is capped at £489. That means the most you can get in total is £14,670.

Exceptions to the rule

You might not be able to get statutory redundancy pay if your employer:

- has offered to keep you on

- has offered you a suitable alternative role, and you’ve refused it without good reason.

Know your rights

Redundancy can be tough, even if you’ve volunteered for it. So don’t be afraid to talk to your employer if you think they’re not giving you a fair deal.


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