Job Redundancy


Redundancy is where you are no longer able to work for your company because there is no work available for the job/duties you were employed to do. This can be due to business closure, workplace closure, or reduced requirement for employees You can get paid for being made redundant as long as:

  • you were legally classed as an employee
  • you had 2 years or more continuous employment

The company may offer you a role in another position, however you'll need to apply for this, go for an interview and then see if you get employed.

If you are one of 20 or more redundancies made in any 90 day period, then you have special rights under collective redundancy.

What are the stages of redundancy?


    1
    Company flags redundancies maybe required
    2
    Company Assesses roles against objective criteria
    3
    At risk warning (a selection of roles completed by employees)
    4
    Company consults with at risk employees
    5
    Company decides which roles are redundant - they must be fair and objective
    6
    Company considers suitable alternative employment where appropriate
    7
    Where no reasonable alternative is available, notice period is worked and paid
    8
    Redundant employees are paid any redundancy due

Was your job redundancy unfair?

Redundancy is not usually a reflection on your ability to do the job as there are various reasons why people may lose their jobs due to redundancy. Below, we show the difference between fair and unfair redundancy

Fair Reasons for Redundancy
Unfair Reasons for Redundancy

  • the business changed what it does or he job you were hired to do no longer exists - for example, it no longer sells a product that you are a seller of)
  • the business operation changed or new technology has made your job unnecessary - for example, it purchased more self-checkouts and no longer need as many cashiers
  • Your employer needs to cut costs by reducing staff numbers
  • the business changed its location
  • The business is closing down or the business has been bought by another company


  • you fell out with your employer
  • you made a complaint or raised a grievance
  • your employer is not happy with your performance
  • your employer is not happy with your conduct
  • you were pregnant or disabled
  • made redundant but job still exists

Redundancy from Employment Law Friend Redundancy should not be used just to get rid of someone the employer doesn't like anymore!

If your selection for redundancy was unfair you may have a case for unfair dismissal. If your employer did not honour your contract (including failing to provide adequate notice), or follow correct redundancy procedure, you may have a case for wrongful dismissal.

If you lose your job and get replaced by someone else, please be aware this is not a redundancy and should be followed up. To protect yourself, make sure to do some research and speak to people who have the knowledge to help.

How do I work out my redundancy due?

Redundancy pay is based on:

  • your earnings before tax (gross pay);
  • the years you've worked for your employer (only complete years, so if you've worked 2 years and 11 months it is 2 years); and
  • your age.

Age
What is the statutory redundancy pay?

22 or under


Your employer must give you half a week's pay for each full year you've worked.

For example: if your gross weekly pay is £500 and you've worked 2 years then you will receive £500 (£500 / 2 = £250 * 2 years worked)

22 to 41


Your employer must give you 1 week's pay for each full year you worked after age 22 half a week's pay for each full year you worked before that.

For example: if you are 23, have worked for the company 3 years and your gross weekly pay is £500 then you will receive £750 (£500 / 2 = £250 * 2 years worked under 22) plus (£500 * 1 year worked over 22)

41 and over


Your employer must give you 1.5 week's pay for each full year you worked after age 41, 1 week's pay for each full year you worked when you were between 22 and 41 half a week's pay for each year you worked before age 22.

For example: if you are 42, have worked for the company 3 years and your gross weekly pay is £500 then you will receive £1,250 (£500 * 2 years worked under 22) plus (£500 * 1.5 = £750 * 1 year worked over 41)

From 6th April 2021 the maximum statutory redundancy compensation limit increased from £538 to £544 per week.


Frequently Asked Questions
There are no specific rules about what should and should not be taken into consideration when selecting individuals for redundancy.

If the overtime is not compulsory however, then it would arguably be unfair to penalise an employee for refusing to work the additional hours. This would need to be taken into account when considering the general fairness of the redundancy selection.
There are notice periods your employer has to abide by in order to conduct a fair redundancy process, especially if you have worked for 2 years or more. If you have worked for the firm from anywhere between a month and 2 years there is a minimum notice period of a week that your employer has to give you, anything more than 2 years and you should be given 1 week’s notice for each full year, up to a maximum of 12 weeks.
It is possible that you can ask your employer if you can leave before your notice period ends, for example if you have another job to go to and in order for this to stand you must get their go ahead, as if not they may consider that you’ve resigned and you could lose your eligibility for redundancy pay. Make sure you get the agreement in writing.

If they agree you can leave early your employer does not have to pay you for the rest of your notice period. You still get the same redundancy pay.
Your employer should give you time off during your redundancy notice period to allow you to go to interviews for new jobs.
Redundancy after maternity leave is scary and it can happen however your employer must make your role redundant for a fair reason.

Yes you can as long as your employer has a redundancy scheme. If you are paid more than £30,000 then you must pay tax, anything less than this then the redundancy pay is tax free.

Do you need help with your redundancy?
Was your selection for redundancy unfair? Were you not given sufficient notice? Are you entitled to more redundancy pay? Get in contact with us and see how we can help.

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