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Redundancy

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Quick links

- The redundancy process
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Redundancy pay


Redundancy

Being told that you are at risk of redundancy can be very stressful, especially because it may be a long time before a final decision is made. We have a lot of experience helping people through the redundancy process. We can make sure you understand your rights and what your employer has to do to help you. We can advise on whether your employer has done anything wrong and if you have a claim against them.

We can also help if you are keen to leave your employer and want to talk through the best way to negotiate a settlement/final payment.

What is redundancy?

Redundancy is when you are dismissed because your employer needs to reduce their workforce. This can be because:

  • There isn’t enough work for you to do
  • There isn’t enough work in the place you work (for example, your job will now be done abroad)
  • Your employer has to make changes to the business (often because they are in financial difficulty) which effects your job.

The redundancy process

These are the basic stages we’d expect to see in a redundancy process. Each process is likely to be a bit different dependent on the size and resources of the employer and the exact situation.

  1. Being informed that you are at risk. This is when the employer lets you know that you might be made redundant. They will normally also inform you about how the process will work at this point.
  2. Pooling. Your employer will decide which employees are at risk. This is called the pool. Getting the right pool is really important. For example; your employer wants to make some secretaries redundant. They should normally put everybody who does the secretary job at risk of redundancy, not just those in one department.
  3. Consultation. Your employer should consult with all affected employees about how the redundancies can be avoided. If there are between 20 and 99 or over 100 employees being made redundant then special consultation procedures may apply, called ‘collective consultation’. If you are made redundant, you can appeal the decision and your employer should tell you how to do this.
  4. Selection. You employer should design a fair system to choose who to make redundant. The selection criteria they use should be objective and you should be consulted about the criteria they use.
  5. Suitable alternative employment. As part of the process, your employer should offer you any other job that they have available that is suitable for you.
  6. Paid time off to look for a new job. You are also entitled to some paid time off to try and find another job or arrange training to help you find a new job.

What if I have been unfairly selected?

If you think that you have been unfairly selected for redundancy or your employer didn’t follow a proper procedure, you may have a claim for unfair dismissal. Our experienced advisers can help you assess whether you have a claim and help you decide what to do next.

What is suitable alternative employment?

Whether or not a job is suitable alternative employment will depend on how similar it is to your job in terms of hours, location, pay, tasks and the other terms on which you will be employed.

If you turn down a suitable job, you can lose your right to a redundancy payment. You get a 4 week trial period in which you can try a new job to see if it is suitable.

How do I challenge a redundancy?

If you think your employer is not following a fair procedure or that you are being targeted unfairly you can raise it as part of the consultation. You should be given a chance to appeal the redundancy decision and you can raise any issues then if you have not had a chance to raise them earlier.

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Redundancy pay

If you have been employed for 2 years (including your one week statutory notice) by your employer you are entitled to a statutory redundancy payment. Your employment contract or the employer’s policies may entitle you to a larger payment or to a payment if you have worked there for less than 2 years, so it is always important to check your employment documentation.

You can calculate your statutory redundancy payment here.

Voluntary redundancy

Sometimes an employer will ask for volunteers to be made redundant. The voluntary redundancy payment or conditions may be better than the compulsory redundancy ones, to encourage people to volunteer. An employer does not have to give you voluntary redundancy, even if you apply for it.

What if I get another job?

If you get a job with another employer it can affect your redundancy payment if you leave your old employer before you are legally entitled to the redundancy payment. We can discuss your options with you.

What is my employer is insolvent and can’t pay me?

If your employer is insolvent and can’t pay, there are things you can do to try and get any money that is owing to you. You can register what you are owed with the insolvency practitioner managing your employer’s shut down. You can find out how to do that here.

The government can make some specific payments to employees of insolvent companies from the National Insurance Fund. You might not get everything that your employer owes you, but you may be able to get something. You can read more about steps you can take here.

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