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Redundancy: What Are My Rights?

Reading time: 5 mins

Carrie Tennick, January 08, 2021

Businesses across the country are facing huge financial pressures as a result of the coronavirus pandemic.

This has caused many of them to look at how to reduce their wage bills, resulting in rising numbers of people being made redundant. Between August and October 2020, 370,000 redundancies took place in the UK, a year-on-year rise of 113,000 redundancies, according to the most recent figures from the Office for National Statistics.

When you’re faced with being made redundant, you’ll no doubt have a lot of questions. The prospect of losing your job is a hugely distressing one, so you should make sure you know what your rights are.

What is redundancy?

Redundancy is what happens when a company no longer needs a certain role to be performed. This means that the person filling that position will no longer have a job to do within the organisation.

Your employer may ask for volunteers for redundancy. They could offer a payout as an incentive. But it is up to your employer to accept those volunteers. They may decide that other workers are more suitable.

If no one takes voluntary redundancy, it will be left to your employer to decide who will no longer have a job.

The legalities around redundancy

Employers have to follow certain rules and processes when it comes to redundancy. If you’ve worked for them for at least two years by the time your role is made redundant, your employer will have to follow a fair process.

They will have to ensure they choose who is being made redundant objectively and that it is not based on any protected characteristic. You are also entitled to one individual meeting with your employer to discuss what’s happening. During this meeting, you can talk about:

  • Why your employer has to make redundancies
  • Why you are being considered for redundancy
  • If there are any other jobs available within your organisation

But if you haven’t worked at your company for two years, your employer doesn’t have to have a clear redundancy process. Your employer may have one in place, though, so it’s worth finding that out.

It’s important to remember that being made redundant is not the same as being sacked. It is not a reflection on your performance. It should only happen if your job role is no longer needed by your employer.

How much redundancy pay you’re entitled to

You are entitled to statutory redundancy pay if you’ve worked for your employer for a minimum of two years.

UK employment law states that the amount of redundancy pay you receive will be based on your age.

  • Aged under 22: You’ll receive half a week’s pay for each full year you worked while under 22
  • Aged 22-41: You’ll receive one week’s pay for each year worked
  • Aged 41 or older: You’ll receive 1.5 weeks of pay for each year you worked

If you still have holiday owed, you are entitled to be paid for it.

The maximum statutory redundancy payout you are entitled to is £16,140. Your employer may offer you more than the statutory amount of redundancy pay, so make sure you check your employment contract.

If your employer is insolvent, you can apply for redundancy pay through the government’s Redundancy Payments Service.

Redundancy notice period

You are entitled to a redundancy notice period, so your employer is not allowed to just terminate your employment immediately.

The length of your notice period depends on how long you’ve worked for the company.

You’ll get:

  • At least one week’s notice if you have been employed between one month and two years
  • One week’s notice for each you worked if you were employed between two and 12 years
  • 12 weeks’ notice if you worked for your employer for 12 years or more

You are also entitled to a consultation period. If your employer is making at least 20 jobs redundant, it has to arrange a collective consultation. This must involve an employee or union representative.

This has to start at least 30 days before anyone is made redundant. But if at least 100 people are being made redundant, these consultations must start at least 45 days before anyone has their job cut.

Redundancy while on furlough

At the height of the Coronavirus Job Retention Scheme, 9.6 million jobs were furloughed. Although the scheme closes in the spring of 2021, analysts are expecting a raft of job losses in the upcoming winter months.

The fact is that employers are legally able to make you redundant while you’re on furlough.

But there are still rules employers must follow if they want to do so. The government has advised employees that their redundancy rights are “not affected by being on furlough”.

Employers are required to use your normal salary when working out what redundancy pay you’re entitled to – not the 80% you may have been receiving.

They are also still required to hold consultations with employees being considered for redundancy. They will need to follow the consultation period rules according to how many people they are looking to make redundant.

Appealing your redundancy

If you think you were chosen for redundancy unfairly or your employer didn’t follow a fair process, you have the right to appeal against being made redundant.

The first thing to do is find out if your employer has an appeals process. If they do, you should follow the necessary steps to lodge your appeal. If they don’t, write to them and explain why you think your redundancy is unfair. Acas recommends following an appeal letter template.

If your employer accepts your appeal, you can return to work on the same employment contract you were on before being selected for redundancy. You will, of course, have to pay back any redundancy pay you’ve received.

And if your employer rejects your appeal, your notice period will continue as planned and you will receive your redundancy pay. But if you still think your job being terminated was unfair, you can begin a claim with an employment tribunal.

If you need the help of expert redundancy solicitors, just get in touch with the team at First4Lawyers. Give us a call, request a call back or make an enquiry online.

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