Redundancies happen when an employer needs to reduce the number of staff it employs.
Unfortunately, the coronavirus pandemic has meant that many employees are now facing the possibility of being made redundant, so what are your rights?
There must be a fair selection and consultation process
Anyone can be selected for redundancy as long as they have not been unfairly targeted for a discriminatory reason; for example because of their age, they are pregnant, or of a particular ethnic origin and so on.
Instead, selection criteria that might be used includes looking at your performance, skills and disciplinary history.
If you are placed at risk of redundancy,your employer has to warn you of this and consult with you about it. This includes explaining why the need for redundancies has arisen and any suggestions that you might have to avoid them, such as working reduced hours or considering whether there are any other vacant roles within the business that you could do.
Your employer should not have made up their mind about any redundancies until they have completed the consultation process, otherwise any dismissal is likely to be unfair.
If your employer is considering making 20 or more people redundant at any one time, there must be a collective consultation process which must start at least 30 days before anyone loses their job.
Similarly, if 100 or more staff are going to be made redundant then the collective consultation process must start at least 45 days before anyone’s employment ends. If it is proposed that there will be less than 20 redundancies then the consultation process will be shorter and can be over in as little as a week.
My employer is asking for people to volunteer for redundancy – can they do that?
Yes – some employers may ask employees to volunteer for redundancy before they undertake a formal selection procedure, but they do not have to.
Voluntary redundancy may appeal to those who had been considering leaving the business anyway or who were intending to retire in the near future.
Do I have the right to stay on furlough leave instead of being made redundant?
No, whilst the furlough scheme remains open until October, there is no obligation on your employer to allow you to remain furloughed until the end of the scheme.
Many may choose to keep you on furlough leave of the duration of your notice period, as they can claim part of your notice pay from the scheme.
If I am made redundant, what payments am I entitled to?
- Notice pay – the statutory minimum is one week’s notice if you have been working for your employer for between one month and two years and an additional week’s notice for each year of service up to a maximum of 12 weeks pay. However, your employment contract may state that you are entitled to more notice than the statutory minimum, in which case you should receive the higher amount. A week’s pay is based on your normal pay, rather than the furlough rate.
- Statutory redundancy pay – this is also based on how long you have worked for your employer. You are entitled to 0.5 week’s pay for each full year you have worked for the company under the age of 22, 1 week’s pay for each complete year of service you were 22 or older, but under 41 and 1.5 week’s pay for each year you have worked for them over the age of 41. A week’s pay is based on your usual pay, rather than the furlough rate, although it is capped at £538 per week. The maximum length of service that can be counted is 20 years and the most you can receive by way of statutory redundancy pay is £16,140. Redundancy pay is not taxed. You can calculate what you might be entitled to here: Calculate Your Redundancy Pay
- Accrued but untaken holiday.
- Pay until the date you are told you will be made redundant.
Additional rights if you are made redundant
If you are still working, then you are allowed to take reasonable paid time off to look for another job.
If you are offered ‘suitable alternative employment’ with the same company then you are entitled to a 4-week trial period. If you don’t think the new job is suitable you must tell your employer within the 4-week trial otherwise you will lose your right to statutory redundancy pay.
My employer has offered me a settlement agreement – what is this?
This is a document that your employer might give you under which they pay you more than the statutory and contractual minimum mentioned above and in return they ask you to give up any claims that you might have against them for anything that has happened during your employment or as a result of its termination.
It is a legal requirement that you take legal advice on the terms of the settlement agreement and normally they will pay for your legal costs. For further information see: Settlement Agreements for Employees FAQs
I am worried that my redundancy is not fair. Should I take legal advice?
If you have been placed at risk of redundancy we can provide you with expert advice based on your particular circumstances, the process your employer is following as well as the grounds that might be available to challenge your selection.
We can also help prepare an appeal against your dismissal and advise on potential unfair dismissal claims.
At a time when it may be difficult for you to find another job knowing where you stand having taken specialist legal advice is likely to be more important than ever.
For more information and to find out how we can help you, please contact us on 0345 646 0406 or fill in our online enquiry form and a member of our Team will be in touch.