Being made redundant can be a worrying and stressful time for many people. We understand how this can impact individuals and their daily lives, which is why we may be able to help you. Our redundancy solicitors are highly experienced in handling redundancy claims, and are dedicated to helping individuals and their families get the legal advice and support they need.
If you believe your employer hasn’t followed the correct protocol with your redundancy, or that you’ve been unfairly dismissed, call our redundancy claims solicitors now on 0808 164 0808 or request a call back, and we will call you.
What is redundancy?
Redundancy is a type of dismissal when your role is no longer required.
There are several reasons why businesses would need to make some of its workforce redundant. It may occur in the following scenarios:
- When there is a closure of a business within which the employee was employed. This is when the business goes into administration or closes down for good.
- Where there is a closure of a workplace where the employee was employed to work.
- When the requirements for employees to carry out work of a particular kind have or are expected to cease or diminish.
A redundancy situation can also arise following a reorganisation or restructure, although not all organisational change will cause a redundancy situation.
How does redundancy work?
Redundancy is normally a situation that occurs through the actions of a business, and has nothing to do with you, personally, as an employee.
Who is entitled to redundancy?
Employees with two or more years’ continuous service are entitled to receive a redundancy payment. A redundant employee is entitled to a payment no less than the statutory redundancy payment which is calculated based on age and length of service.
In terms of your length of service, according to GOV.UK, you’ll get:
- Half a week’s pay for each full year you were under the age of 22
- One week’s pay for each full year you were over the age of 22, but under the age of 41
- One and a half week’s pay for each year that you were over the age of 41
Please note: length of service is capped at 20 years.
Sometimes, employers choose to make “enhanced” redundancy payments.
When should I receive my redundancy payment?
Your employer has a duty to pay you your redundancy payment following the termination of your employment. By law you should receive a statement that details how your payment was calculated.
You and your employer can also agree a payment date soon after your final day of employment, if you wish.
If you feel that your employer has miscalculated your redundancy pay or hasn’t paid you correctly during your notice, you may wish to raise this with them. It may be an innocent oversight that can be corrected, or if they refuse to pay you what you’re owed, you may wish to take legal action.
Employment redundancy legal advice
Your employer is legally permitted to make you redundant, if they follow a fair procedure. What is fair will depend on the circumstances of each case.
We’ve broken down the process below:
- Don’t make decisions too quickly – all employers who are considering making employees redundant have a duty to make early plans, but still consider alternatives before making any final decisions
- Ask for volunteers first –before selecting people for redundancy, an employer can offer the chance for the employees to volunteer for redundancy
- Consider alternatives – before making anyone redundant, your employer should have considered alternatives first. Could they move you to a different team? Could they create a new role for you in a different line of work at the same company? Could your hours of work be reduced? Could the company look at not paying overtime?
- The selection pool – before applying a selection criteria, it is important to identify the correct pool of employees
- Use criteria – when selecting employees for redundancy, it’s important that your employer considers a set of criteria. The selection criteria should, as far as possible, be objective. It is important that the criteria used is fair and that it is not discriminatory. For example, although selection on the basis of attendance is fair on the face of it, employers should check the reasons for absence to ensure that the criteria does not put women or disabled employees at a particular disadvantage.
- Listen to employees – individual consultation is crucial to a fair redundancy. It should be a means by which information is gathered to assist an employer in making a decision, and give employees the opportunity to ask questions. Employees have the right to make suggestions when faced with redundancy, and should be allowed time off to seek other employment if they have received notice that they are being dismissed.
- Make it clear they can appeal – it is advisable that employers allow an appeal process, as not doing so may provide an employee with a stronger claim to show the process was unfair.
- Put it in writing – employees should be informed in writing when they are made redundant.
- Consultations – if 20 or more employees are being made redundant, the employer is under a duty to collectively consult with each individual.
Do I have to work my redundancy period?
Being made redundant doesn’t mean you leave straight away. You can still work your notice period. You may be offered “pay in lieu of notice”, where your employer pays you instead of you working your notice. You must work your normal hours during your notice period to receive your normal pay, and your redundancy pay when you leave.
Note: regarding the COVID-19 pandemic and furlough, an employee can remain on furlough and receive payment under the Job Retention Scheme while working a notice period, if the notice is one week more than their statutory entitlement.
How much redundancy pay do you get?
Your redundancy pay will be calculated based on your length of service (see previous). But, there are caps in place as detailed by GOV.UK:
If you were made redundant on or after 6th April 2021, your weekly pay would be capped at £544. The maximum statutory redundancy pay you could get would be £16,320. If you were made redundant before 6th April 2021, your payment amounts would be lower.
What is voluntary redundancy?
Simply put, this is where an employee chooses redundancy for whatever reason. Your employer can ask if anyone wishes to take voluntary redundancy before selecting people.
It is up to your employer whether or not they accept your offer of voluntary redundancy.
If you’re considering taking voluntary redundancy, you may wish to consider the following:
- What is the package that’s on offer?
- What will you do after taking redundancy?
- Will taking voluntary redundancy affect your mortgage?
Can I get redundancy pay if I am over 65?
Yes, you can. You’re entitled to a week and a half’s pay for each year of employment (working for your current employer) that you’ve worked over the age of 41.
Many people in the older age brackets feel as though they are disregarded or discriminated against because of their age, and worry that they may be made redundant as a result. This is unlawful, and would be classed as age discrimination.
Unfortunately, you will need to pay tax on your redundancy pay if your final payment exceeds £30,000.
Contact our redundancy claims solicitors
Being made redundant may or may not have been your choice. In any case, you are still entitled to the correct pay if you work your notice, and (if you’ve served for longer than two years) a redundancy payment that is calculated properly. Your employer should also have gone through the process with you.
If you feel as though your employer hasn’t followed a fair procedure, or you’ve been underpaid and haven’t been able to get what’s owed to you, we might be able to help with a redundancy compensation claim. We recommend speaking with our employment solicitors in the first instance, who can advise on the next steps within this process.
In general you have three months less one day from the most recent act of discrimination or breach to take action, meaning you should act fast.
We recommend you speak to one of our lawyers in the first instance. As part of the process, you’ll need to get in touch with the Advisory, Conciliation and Arbitration Service (ACAS), who will aim to achieve early conciliation with your employer. However, our lawyers can assist in this process where appropriate and we have formally been instructed. Please be aware that the ACAS process can take up to around a month to complete, which will be taken from the three months you have to begin with. It’s important to act quickly in order to bring a tribunal claim. If the conciliation procedure is unsuccessful, we may be able to support you with the tribunal. If you feel you have a potential employment claim please act quickly and contact us today.