Redundancy
If your employer needs to reduce their workforce or stops carrying on business altogether, you may be faced with a redundancy situation.Redundancy can be an anxious and stressful time for anyone, worrying about losing their employment.
Do I need legal advice when being made redundant?
The Employment Rights Act provides protection to employees and stipulates that employers must act fairly and objectively throughout the redundancy process and when making selections. Every employee is protected by the employment rights set out by law.
Our employment law experts can help guide you through this difficult time and help you to move forward. We will also advise on whether your employer is following a fair, proper and legal procedure.
If you feel as though you have been made redundant for unfair reasons or if an unfair redundancy procedure is being followed, please contact our employment law specialists for advice.
Redundancy Pay
If your employer is making you redundant, you may be entitled to redundancy pay. The law sets out a minimum amount of redundancy pay, although some employers may offer a higher amount.
Redundancy pay is paid by your employer.
If your status is an ‘employee’ and you have been at your current workplace for 2 years or more continuously, you will be entitled to statutory redundancy pay. You are an employee if you work under an employment contract. To find out more about your status, contact us or visit Acas.
Temporary workers are entitled to redundancy pay if they have a contract of more than 2 years, or who have worked continuously for their employer on short term contracts for 2 years or more.
You will not receive redundancy pay if you have turned down an offer of suitable alternative employment from your employer.
What if I have not been given the correct pay?
Some employers may offer contractual or enhanced redundancy pay. If they do, you will find the details in your contract of employment. Your employer cannot give you less than the statutory redundancy pay.
If you do not believe you have been given the correct amount of redundancy pay, you have 6 months from the date of your redundancy, minus a day, to make a claim to the tribunal.
How much redundancy pay will I receive?
Statutory redundancy pay is worked out based on your current weekly pay, your age, and your length of service for your employer. If you are entitled to redundancy pay you will receive:
Half of your weekly pay for each year of service when you were under the age of 22
One week of pay for each year you were aged between 22 and 41
One and a half week’s pay for each year of service over the age of 41
The maximum weekly pay you can receive is £525, and the maximum statutory pay you can receive is £15,750.
The length of service that can be taken into account is capped at 20 years. When calculating your redundancy pay, the amount is based on the 20 years directly preceding your redundancy.
For example:
You started working for your employer aged 20. You have worked there for 25 years and are now aged 45. You receive £300 per week.
The length of service to be considered is capped at 20 years, so the first five years you worked are discounted
16 years aged 25-41 = 16 x 1 weeks’ pay = 16 weeks' pay
4 years over the age of 41 = 4 x 1.5 weeks’ pay = 6 weeks' pay
6 weeks + 16 weeks = 22 weeks' pay
22 x £300 = £6,600 redundancy pay
Redundancy FAQs
How will my employer decide who to make redundant?
If you are selected for redundancy then you are entitled to know the reason why. An employer must apply the selection criteria fairly, objectively and consistently. Examples of selection criteria that can be used are;
Skills and qualifications
Length of service
Attendance
Performance at work
An employer must not be discriminatory when making their decision.
Will I be required to work my notice?
An employer must give you notice when making you redundant. The length of the notice they must give depends upon how long you have worked for them:
If you have been there for 12 years then you must be given 3 months’ notice.
If you have been employed between 2 years and 12 years, you must be given one weeks’ notice per year.
If you’ve been there between one month and 2 years you must be given at least one weeks’ notice.
What information am I entitled to from my employer?
An employer must consult with you about any possible redundancy. They should follow a clear and fair procedure and give you the opportunity to ask questions and appeal any decisions.
The degree of consultation required depends on the number of employees affected by the redundancy process;
If fewer than 20 employees are being made redundant then you can be consulted with on an individual basis.
If more than 20 employees affected then a collective consultation must take place.
What is "suitable alternative" employment?
An employer may offer you suitable alternative employment. The alternative should be “substantially equivalent” to the role which is now redundant. It is up to your employer to show that the offer is suitable by taking into consideration the following factors:
Similarities between your current job and the new job
The terms and conditions of the new job
How your skills, abilities and circumstances are relevant to the new job
The pay
If you were to unreasonably reject the offer of a suitable alternative job then you would forfeit your right to a redundancy payment.
When will I have the time to find a new job?
All employees have the right to reasonable time off work to look for another job or arrange training.
Can I negotiate the amount I receive?
We are experts at looking at the individual facts of a case and have experience in negotiating termination packages. Please see our settlement agreements page for further information on this point.
Get in touch
Do you have a legal matter you'd like to discuss with us? Get in touch using the details below or use the form here and a member of our team will be in touch to discuss your enquiry.
Address: Spencer Shaw Solicitors Limited
Vancouver House, 111 Hagley Road, Edgbaston, Birmingham B16 8LB
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Saturday, Sunday & Bank Holidays - Closed
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