Personal Law

At Risk of Redundancy? What to Do

Estimated read time: 4 mins

Carrie Tennick, April 08, 2021

The Covid-19 pandemic has created a huge amount of economic uncertainty. Thousands of people have lost their jobs and many others are worried about their job security.

When a business has to reduce its workforce – usually because of financial pressures – it makes employees redundant.

If you are at risk of redundancy, knowing your rights can help you work out what to do.

When is redundancy legal?

Not every redundancy is legal.

For example, if your employer tells you that you’re being made redundant but then hires someone to replace you, this is not a genuine redundancy. In this case, you could be able to make an unfair dismissal claim.

Your employer is only allowed to make its staff redundant if:

  • It closes down
  • It closes your office or branch
  • It needs fewer people to do the work you do
  • Technology makes your job unnecessary
  • It needs to cut costs by reducing employee numbers

When your employer is making 20 or more people redundant, they have to carry out a ‘collective consultation’. If they’re ending the employment of fewer people, they don’t have to follow any set rules but it’s recommended that they fully consult employees and their representatives.

If your employer hasn’t followed the rules, your redundancy could be unfair. You could then take them to an employment tribunal.

Redundancy during furlough

At various points since its introduction, the Coronavirus Job Retention Scheme has supported 11.4 million jobs, according to the government. And unfortunately, redundancy is a possibility while you’re on furlough.

But being furloughed does not affect your statutory redundancy rights. You’re still entitled to redundancy pay based on your normal wage, rather than the 80% many receive while they’re on furlough.

You are also entitled to the correct notice period and must be paid throughout. This should be based on your normal wage, rather than your furloughed wage.

If your employer is not operating according to the law, you could be able to take legal action.

Get help with an unfair redundancy here

Help finding a new job

When you’re told about potentially being made redundant, one of your first thoughts will likely be finding a new job. Legally, your employer should not stand in the way of finding something new.

If you’ve worked for your employer for two years by the end of your redundancy notice period, they are legally obliged to allow you to take time off to apply for new jobs or to attend training. This can be at any point in your normal working hours and your employer can’t ask you to make that time up or change your working hours to fit around these appointments.

You are entitled to be paid at your usual hourly rate for up to 40% of a week’s work. This means that if you work five days a week, you can receive your normal pay for up to two days of time off to look for work. You are legally allowed to take more time to look for work, but your employer doesn’t have to pay you.

When your employer has given you a date for your job ending, you can take ‘reasonable’ time off. What this means depends on things like how long your notice period is, if the business can operate without you, how far you need to travel to find work and whether there are any stipulations in your contract about it.

Suitable alternative employment

Although there are fewer job vacancies available than a year ago – 601,000 from December 2020 to February 2021 – many jobs are unadvertised. Your current employer may be able to find a role for you in another department, so it’s worth finding out.

If you’ve worked for them for two years, your employer must try to find you another role. They must do the same if you’re on parental leave when you’re made redundant. They should discuss alternative employment with you during individual discussions on redundancy.

An alternative role could be based in another location, come with a different wage, have different duties or even be at another company owned by your employer. But even if a role doesn’t match your experience, you should be allowed to apply.

You’re allowed four weeks to try out an alternative job. During this period, you can work out whether you want to take the role. If your employer doesn’t let you try the job out before making you redundant, it could be unfair. If the job isn’t suitable for you, you can tell your employer and this won’t affect your statutory rights.

But it’s important to remember that you might lose your right to statutory redundancy pay if you turn down suitable alternative employment.

Sorting your finances

If you’re at risk of redundancy, you should take a look at your finances as soon as possible. Since you probably won’t know how long you might be out of work, look at any debts and see if you can clear them.

You can also look into help with your mortgage, if you have one. You may be able to take a mortgage holiday while you look for a new job or agree temporary changes with your lender. Speak to them as soon as you can to find out what help is available.

You may also be able to claim certain benefits. A calculator could help you work out what you’re entitled to.

If you’ve been the victim of an unfair redundancy, you don’t have to accept it. Taking your employer to a tribunal could help you secure compensation or your old job back, which could be invaluable at this time.

Talk to the team at First4Lawyers to find out how we can help.

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