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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:
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:
Your employer can make you redundant without having to follow a selection process if your job no longer exists, eg if:
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:
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.
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:
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:
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:
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:
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:
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:
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:
Collective consultations must cover:
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:
Redundancy - Electing employee reps
If you’re an employee affected by the proposed redundancies you can:
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:
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:
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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