Redundancy

Three things you need to know if you are being made redundant

Being made redundant is a situation which many people dread. However, unfortunately, since 2008 it has become something which more and more people are experiencing. According to the Office for National Statistics, 111,000 people had become redundant in the three months up to February 2016. While these figures are lower than at the start of the recession, they indicate that redundancy remains an issue for many people. If you are facing redundancy then here are three key things that you need to know.

Your Redundancy must be fair

If you are being selected for redundancy then there must be an objective and fair reason for choosing you over another employee. Employers are required to take significant care when selecting people for redundancy – some of the most common methods used include first in last out, looking at disciplinary records and making decisions on the basis of staff appraisals, skills and experience.

If you believe that you have been selected for redundancy as a result of a characteristic such as age, race or religion then this is not a fair and objective process and you may be able to make an unfair dismissal claim (and a discrimination claim) against your employer. There are two situations in which an employer does not need to follow a fair and objective process for redundancy and these are where either the entire business is being shut down or you are the only employee in your part of the business.

You are normally entitled to redundancy pay

If you are an employee with two or more years of employment then you will normally be entitled to statutory redundancy pay – any redundancy pay that you receive under £30,000 is not taxable. Your contract may also entitle you to redundancy pay over and above the statutory minimum. Statutory redundancy pay will not be an option if you have:

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  • been dismissed for misconduct
  • offered suitable alternative work by the employer, which you refuse without good reason
  • made an offer to stay on by your employer

Statutory redundancy pay is calculated on the basis of years – half a week’s pay for each year for under 22s, a week’s pay for each year for 22-41 year olds and a week and a half’s pay for each year for those over 41. Caps mean that the maximum statutory redundancy pay you can receive is £14,370.

You must be given notice of Redundancy

The statutory minimums require a week’s notice for those employed between one month and two years and a week’s notice for each year work for those employed two – 12 years. If you have been with the organisation for 12 years or more then the minimum requirement is 12 weeks. Your contract may also require additional notice so make sure you read it if redundancy is on the horizon. You should be paid throughout your notice period. If your employer cannot give you a notice period they may offer payment in lieu of notice – this should include full pay and any extras such as pension contributions and private health insurance payments.

Get in touch with the Goodharts team for more advice today by calling 0191 206 4103.

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