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Redundancy - Your Rights and Redundancy Pay.

Information provided by HMRC

Redundancy - Overview

Redundancy is a form of dismissal from your job. It happens when employers need to reduce their workforce.

If you’re being made redundant, you might be eligible for certain rights, including:

  • Redundancy pay
  • A notice period
  • A consultation with your employer
  • The option to move into a different job
  • Time off to find a new job

You must be selected for redundancy in a fair way, eg because of your level of experience or capability to do the job.

You can’t be selected because of age, gender, or if you’re disabled or pregnant etc. If you are, this could be classed as an unfair dismissal. [ To know more about unfair dismissal visit the HMRC website ]

Redundancy - Being selected for redundancy

Your employer should use a fair and objective way of selecting you for redundancy.

Commonly used methods are:

  • Last in, first out (employees with the shortest length of service are selected first)
  • Asking for volunteers (self-selection)
  • Disciplinary records
  • Staff appraisal markings, skills, qualifications and experience

Your employer can make you redundant without having to follow a selection process if your job no longer exists, eg if:

  • Your employer is closing down a whole operation in a company and making all the employees working in it redundant
  • You’re the only employee in your part of the organisation

Your employer may offer you a different role if one is available.

If your employer uses ‘last in, first out’, make sure it’s not discrimination, eg if it means only young people are made redundant.

Redundancy - Reapplying for your own job

You might be asked to reapply for your own job, which could help your employer decide who to select.

If you don’t apply or you’re unsuccessful in your application, you’ll still have a job until your employer makes you redundant.

Redundancy - Unfair selection

You can’t be selected for the following reasons - your redundancy would be classed as an unfair dismissal:

  • Gender
  • Marital status
  • Sexual orientation
  • Race
  • Disability
  • Religion or belief
  • Age
  • Your membership or non-membership of a trade union
  • Health and safety activities
  • Working pattern (eg part-time or fixed-term employees)
  • Maternity leave, birth or pregnancy
  • Paternity leave, parental or dependants leave
  • You’re exercising your statutory rights
  • Whistleblowing (eg making disclosures about your employer’s wrongdoing)
  • Taking part in lawful industrial action lasting 12 weeks or less
  • Taking action on health and safety grounds
  • Doing jury service
  • You’re the trustee of a company pension scheme

Redundancy - Appealing the decision

You can appeal if you feel that you’ve been unfairly selected. Write to your employer explaining the reasons.

You may be able to make a claim to an employment tribunal for unfair dismissal.

Redundancy - Voluntary redundancy

It’s up to your employer whether they actually select you if you volunteer for redundancy.

Your employer can’t just offer voluntary redundancy to age groups eligible for an early retirement package - this could be unlawful age discrimination.

However, an early retirement package (for certain age groups) could be one element of a voluntary redundancy offer open to all employees.

Redundancy - Apprentices

Talk to your manager and training provider if you’re an apprentice and you’re worried about being made redundant.

Your training provider or the National Apprenticeship Service might be able to help you find another employer to help you complete your apprenticeship.

Redundancy - Redundancy pay

You’ll normally be entitled to statutory redundancy pay if you’re an employee and you’ve been working for your current employer for 2 years or more.

You’ll get:

  • Half a week’s pay for each full year you were under 22
  • 1 week’s pay for each full year you were 22 or older, but under 41
  • 1 and half week’s pay for each full year you were 41 or older

On how to Calculate your redundancy pay please visit the HMRC website for an online calculator

Redundancy pay (including any severance pay) under £30,000 isn’t taxable.

Redundancy - Exceptions

You’re not entitled to statutory redundancy pay if:

  • Your employer offers to keep you on
  • Your employer offers you suitable alternative work which you refuse without good reason

Being dismissed for misconduct doesn’t count as redundancy, so you wouldn’t get redundancy pay if this happened.

You’re not entitled to statutory redundancy pay if you fall into one or more of the following categories:

  • Merchant seamen, former registered dock workers (covered by other arrangements) or share fishermen
  • Crown servants, members of the armed forces or police services
  • Apprentices who are not employees at the end of their training
  • A domestic servant who is a member of the employer’s immediate family

Redundancy - Short-term and temporary lay-offs

You can claim statutory redundancy pay if you’re eligible and you’ve been temporarily laid off (without pay or less than half a week’s pay) for either:

  • More than 4 weeks in a row
  • More than 6 non-consecutive weeks in a 13 week period

Write to your employer telling them you intend to claim statutory redundancy pay. This must be done within 4 weeks of your last non-working day in the 4 or 6 week period.

If your employer doesn’t reject your claim within 7 days of receiving it, write to your employer again giving them your notice.

Your claim could be rejected if your normal work is likely to start within 4 weeks and continue for at least 13 weeks.

Redundancy - Notice periods

You must be given a notice period before your employment ends.

The statutory redundancy notice periods are:

  • At least 1 week’s notice if employed between 1 month and 2 years
  • 1 week’s notice for each year if employed between 2 and 12 years
  • 12 weeks’ notice if employed for 12 years or more

Check your contract. Your employer may give you more than the statutory minimum, but they can’t give you less.

Redundancy - Notice pay

As well as statutory redundancy pay, your employer should either:

  • Pay you through your notice period
  • Pay you in lieu of notice depending on your circumstances

Redundancy - Payment in lieu of notice

Payment in lieu of notice is money paid to you by your employer as an alternative to being given your full notice.

This means that your contract can be ended without any notice.

You must get all of the basic pay you would have received during the notice period. You may get extras such as pension contributions or private health care insurance if they’re in your contract.

To do this you must have a payment in lieu of notice clause in your employment contract. If it’s not in your contract and you’re paid in lieu you must receive full basic pay, plus compensation for any benefits you would have got during the notice period.

Redundancy - Consultation

You’re entitled to a consultation with your employer if you’re being made redundant. This involves speaking to them about:

  • Why you’re being made redundant

any alternatives to redundancy

You can make a claim to an employment tribunal if your employer doesn’t consult properly (eg if they start late, don’t consult properly or don’t consult at all).

Redundancy - Collective redundancies

If your employer is making 20 or more employees redundant at the same time, the consultation should take place between your employer and a representative (rep).

This will either be:

  • A trade union rep (if you’re represented by a trade union)
  • An elected employee rep (if you’re not represented by a trade union, or if your employer doesn’t recognise your trade union)

Collective consultations must cover:

  • Ways to avoid redundancies
  • The reasons for redundancies
  • How to keep the number of dismissals to a minimum
  • How to limit the effects for employees involved, eg by offering retraining

Your employer must also meet certain legal requirements for collective consultations.

Redundancy - Length of consultation

There’s no time limit for how long the period of consultation should be, but the minimum is:

  • 20 to 99 redundancies - the consultation must start at least 30 days before any dismissals take effect
  • 100 or more redundancies - the consultation must start at least 45 days before any dismissals take effect

Redundancy - Electing employee reps

If you’re an employee affected by the proposed redundancies you can:

  • Stand for election as an employee rep
  • Vote for other reps

Redundancy - Fixed-term contract employees

Your employer doesn’t need to include you in collective consultation if you’re employed under a fixed-term contract, except if they’re ending your contract early because of redundancy.

Redundancy - Suitable alternative employment

Your employer might offer you ‘suitable alternative employment’ within your organisation or an associated company.

Whether a job is suitable depends on:

  • How similar the work is to your current job
  • The terms of the job being offered
  • Your skills, abilities and circumstances in relation to the job
  • The pay (including benefits), status, hours and location

Your redundancy could be an unfair dismissal if your employer has suitable alternative employment and they don’t offer it to you.

Redundancy - Refusing an offer

You may lose your right to statutory redundancy pay if you unreasonably turn down suitable alternative employment.

You can make a claim to an employment tribunal if you think the job you’ve been offered isn’t suitable.

Redundancy - Trial periods

You have the right to a 4 week trial period for any alternative employment you’re offered.

The 4 week period could be extended if you need training. Any extension must be agreed in writing before the trial period starts.

Tell your employer during the trial period if you decide the new job isn’t suitable. This won’t affect your employment rights, including your right to statutory redundancy pay.

You’ll lose your right to claim statutory redundancy pay if you don’t give notice within the 4 week trial period.

Redundancy - Time off for job hunting

If you’ve been continuously employed for 2 years by the date your notice period ends, you’re allowed a reasonable amount of time off to:

  • Look for another job
  • Arrange training to help you find another job

How long you can take will depend on your circumstances.

No matter how much time you take off each week to look for another job, your employer only has to pay you up to 40% of that week’s pay for it.

Redundancy - Example

You work 5 days a week and you take 4 days off in total during the whole notice period - your employer only has to pay you for the first 2 days.

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