REDUNDANCY
Get legal advice on your redundancy rights:
Make sure you are being treated fairly and legally
Understand your rights to information, redundancy pay and time off
Find out if you have a claim for unfair dismissal and get support in making your claim
Get advice on the meaning and effect of any settlement agreement you are offered
Clear advice in plain English - no confusing legal jargon
Redundancy can be an anxious and stressful time. Our employment law experts will guide you through the process, making it as smooth and simple as possible to help you to move forward with peace of mind.
WHAT TO EXPECT DURING THE REDUNDANCY PROCESS
How will my employer decide who to make redundant?
If your role is no longer needed in the company in its current form, it may be made redundant. This could be because your employer needs to reduce, restructure, or relocate the workforce, or may be carrying out work in a different way. There must be a genuine business reason for making the changes.
Your employer must follow a fair redundancy process to dismiss and compensate staff who are no longer required.
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. Find out more about discrimination
What information am I entitled to from my employer when being made redundant?
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.
Compulsory and voluntary redundancy
Your employer may offer you the chance to volunteer for redundancy. This benefits employees who are happy to move on to another role, ready to retire, or want the redundancy payment and the employer, who can keep on employees who are most committed to the organisation. Sometimes employers offer incentives for taking voluntary redundancy, like extra redundancy pay or not having to work your notice period.
Voluntary redundancy should be offered to everybody equally. If you feel you are being singled out or pressured into taking voluntary redundancy, especially on grounds of a protected characteristic such as your age or disability, you could have a legal claim against your employer.
Just because you volunteer for redundancy, you are not guaranteed to be selected, especially if more people volunteer for redundancy than need to be made redundant.
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. Find out more about employment status here.
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 redundancy 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.
Do you pay tax on redundancy pay?
Statutory redundancy pay is not taxable. Enhanced redundancy pay may be taxable, so you should seek legal advice.
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 £719.
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
Can I be made redundant if my job still exists?
You cannot be made redundant if the job still exists unless there have been significant changes to the role. If there are significant changes to the job, such as being done in a different way or relocated, then redundancies may be justified.
If suitable alternative roles are available, your employer must offer these to the employees being made redundant. If you believe there are suitable alternative roles and your employer has not offered you these, you should ask about the roles. It could be that the terms and conditions are less favourable than your role, or that the role is based in a different location.
If your employer is reducing the number of roles available doing the same job, they must follow a fair and legal process to decide which employees are kept on.
Can I appeal against redundancy?
Your employer may have an appeals process, but they are not obliged to offer one. If your employer does have an appeals process, this will not extend the time you have to bring a claim. You will still need to bring your claim within three months of the date of the dismissal (redundancy). As you appeal, keep this date in mind, and consider seeking legal advice in case the appeal is unsuccessful.
If your employer does not offer a process to appeal but you believe the process was unfair, you still have the right to challenge the decision as with any employment law dispute. You can write to your employer explaining why you think the redundancy was unfair – they may be willing to try and resolve the dispute. You can also seek legal advice about the potential to make a tribunal claim or negotiate a settlement.
Can I be made redundant on maternity leave?
In a genuine redundancy situation, you can be made redundant while pregnant or on maternity leave if your employer follows a fair process. However, your employer cannot make you redundant because you are (or have been) pregnant or on maternity leave. If your pregnancy was a direct or indirect factor in deciding to make you redundant, even if it was not the only reason, then your dismissal may be unfair.
You have enhanced protection from redundancy from the time you inform your employer that you are pregnant until 18 months after the birth. This means you must be offered first refusal of any suitable alternative vacancies.
You must also be included in consultation even if you are on maternity leave.
Find out more about pregnancy and maternity discrimination.
Can a company make you redundant after posting a job vacancy?
This will depend upon the job vacancy. Employers can only make you redundant if there is no longer a need for your role. If there is suitable alternative employment, they must offer this to people being made redundant.
If the vacancy advertised is for your role or something similar, the redundancy could be unfair. However, if the job role advertised is significantly different, this is unlikely to affect your redundancy.
Do small businesses have to pay redundancy pay?
Yes. All businesses must pay statutory redundancy pay to employees who have worked for them for at least 2 years.
Who pays redundancy if company is insolvent?
You may be able to apply to the government for statutory redundancy pay if your employer cannot pay it.
When will I have time to find a new job?
When being made redundant, all employees have the right to reasonable time off work to look for another job or arrange training.
Can I ask to be made redundant?
If your workplace is making redundancies, you may be able to take voluntary redundancy. However, your workplace is not obliged to offer voluntary redundancy, and even if you volunteer you are not guaranteed to be selected.
If your workplace still needs somebody in your role, this is not a redundancy situation, and so your employer has no obligation to pay you redundancy pay.
Can I be made redundant due to sick leave absence?
If your employer uses a criteria that impacts harshly on you because of a protected characteristic, this could be indirect discrimination. If your absence is related to a disability, then your employer should make reasonable adjustments to the redundancy criteria to account for this.
Find out more about disability discrimination.
If your sick leave is not related to a disability, your employer is entitled to look at attendance when selecting people for redundancy. You must be included in the consultation process even if you are on sick leave at the time.
Who is entitled to redundancy pay?
Employees who have worked for their employer for at least 2 years are entitled to redundancy pay. ‘Employees’ has a more specific legal meaning than its general use – find out more about employment status (LINK).
You will not be entitled to redundancy pay if your employer has offered you suitable alternative employment and you have turned it down without a good reason.
Can I negotiate the amount of redundancy pay 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.
Will I be required to work my notice when made redundant?
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.
Can I be made redundant after a TUPE transfer?
Yes, but with some additional considerations. If the redundancies relate to the transfer, your employer must also have an economic, technical, or organisational need for the redundancies.
How soon after redundancy can I start a new job
This will depend upon what you have agreed with your employer. Check your employment contract or your settlement agreement (if you have one) – there may be clauses that limit your options for a certain time period after the employment ends in order to prevent unfair competition. If there aren’t any such terms, there is no reason you can’t go straight into another job.
Can an apprentice be made redundant?
Yes. However, you are only entitled to redundancy pay if you have worked for your employer for 2 years or more.
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