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A Guide to the Redundancy Process

By: Abigail Taylor - Updated: 1 Aug 2017 | comments*Discuss
 
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Being made redundant is difficult for anyone. There are many reasons why companies make employees redundant: technology has reduced the number of employees necessary, an office is being closed, the business is relocating, or the company is reducing staff to cut costs.

Who is made redundant?

Your employer should use fair and objective means to select which staff they make redundant. There are no rules about what procedure should be used; as long as the procedure is fair, it is up to your employer how they select which employees to make redundant.

Some common methods are:

  1. Asking for volunteers (some people may wish to be made redundant so that they can start a new job or retire early)
  2. "Last in, first out" (those with the shortest service leave first)
  3. By review of disciplinary records
  4. By assessment of skills, qualifications or experience

Note: If your employer asks you to re-apply for your job and you chose not to do so, you will still have a job until your employer decides to select you for redundancy.

The selection is unfair if you have been selected for redundancy for discriminatory reasons. Discriminatory reasons include:

  • If you had to do jury service
  • If you are a member of a trade union
  • If you are on or had taken maternity or paternity leave
  • If you have made complaints about Health and Safety at your company
  • On the basis of your age, religion, race, disability, gender or sexual orientation

If you are an apprentice and are worried about being made redundant, speak to your training provider or the National Apprenticeship Service who might be able to help you find another employer with whom you can finish your apprenticeship.

Redundancy pay

You will normally be entitled to statutory redundancy pay if you have been employed by your current employer for more than two years.

  • If you are under 22, you will get half a week's pay for each full year of employment with your current employer.
  • If you are aged 22 to 41, you will receive one week's pay for each full year of employment with your current employer.
  • If you are aged 41 or older, you will receive one and a half week's pay for each full year of employment with your current employer.

There is a redundancy pay calculator at www.gov.uk/calculate-your-redundancy-pay. Of course your employer may offer you a redundancy package offering more money. Note that the first £30,000 of any redundancy pay is not taxable.

Exceptions:You will not be entitled to statutory redundancy pay if:

  • Your employer does not in fact make you redundant (even if you volunteered to be made redundant)
  • Your employer offers you suitable alternative employment which you refuse to take without any good reason [see section below]
  • You have been dismissed for misconduct (rather than being made redundant)
  • You work in one of the following jobs: merchant seaman, member of armed forces or police services, an apprentice who is not an employee at the end of their training, or a domestic servant who is a member of the employer's immediate family.

Temporary redundancy

If you have been temporarily laid off without pay (or with less than half a week's pay), for either 4 weeks in a row or 6 non-consecutive weeks in a 13 week period, you can claim statutory redundancy pay.

To claim, write to your employer to give them notice of your intention to claim within 4 weeks of your last non-working day in the 4 or 6 week period.

Your employer may reject your claim if your normal work is likely to restart with the next four weeks and continue for at least 13 weeks at normal rates / hours.

Notice periods

Your employer must give you notice before your employment ends. This must be:
  • If you have been employed for between 1 month and 2 years, at least 1 week
  • If you have been employed for between 2 and 12 years, at least 1 week for every year employed
  • If you have been employed for 12 years or more, 12 weeks' notice.

Your contract may entitle you to more notice than the statutory minimum. Note however that your contract cannot purport to give you less notice than the statutory minimums set out above.

Your employer must pay you throughout your notice period. Alternatively, they may choose to end your contract immediately and pay you in lieu of notice. They can only make payment in lieu of notice if such a contract term exists in your contract.

Your employer must also give you reasonable time off in order to look for another job, attend interviews and arrange training to assist you in getting another job. However if you chose to have time off to look for another job, your employer only has to pay you up to 40% of that week's pay.

Steps employers must take

Employers must consult with their employees before making them redundant. This consultation can be done privately with the individual concerned, or collectively with a group if a large number of staff are being made redundant. The consultation should discuss:
  • The reasons why you are being made redundant (including why redundancies are occurring and why you have been selected for redundancy)
  • Any alternatives to redundancy (such as alternative employment)

If 20 or more staff members are made redundant within a 90 day period, the employer must first have contacted their employee's trade union(s) at least 30 days prior to any redundancies to discuss any ways to avoid mass redundancy. If 100 or more employees are to be made redundant, this consultation with trade unions should take place at least 45 days before the first redundancies of the group occur.

If relevant consultations don't happen, or you feel that you have been selected unfairly for redundancy, you can follow your company's grievance procedure. If you are still not happy, you can take your employer to an Employment Tribunal.

The employment tribunal

You can take your employer to an Employment Tribunal if you think that you have been made redundant or dismissed unfairly. The Tribunal is an independent judicial body who may award you compensation if you win your case.

Note: You usually have to take your case to an Employment Tribunal within 3 months of the unfair action (such as dismissal) occurring.

To download the appropriate form to make a claim to the Tribunal, visit www.gov.uk/employment-tribunals/taking-a-case-to-an-employment-tribunal

Suitable alternative employment

Instead of making you redundant, your employer may offer you 'suitable alternative employment'. This is essentially another job in the same, or an associated company.

There are many factors which effect whether a job is a suitable alternative. These include:

  • How similar the work is to your current job
  • The skill levels of the jobs
  • The comparable status of your position
  • The comparable hours
  • The comparable pay
  • The location

Example 1

Mary works as a receptionist for the NHS in Leeds Monday to Friday, 9-5pm. She drives to work. She has no children or dependents. She is offered a role as a receptionist for the NHS only 5 miles out of Leeds for the same pay. However the new hours are Monday to Friday 8:30am to 4:30pm.This is suitable alternative employment unless Mary has a very good reason why she cannot start work earlier - having to get up earlier is not a good reason.

Example 2

James works as a Travel Sales Rep. He is a manager at his branch working Tuesday to Saturday 9am to 8pm. He has no children or dependents and lives with his girlfriend 6 miles from his current office. He is offered a role for the same amount of money but working Monday to Friday 9am to 7pm. However the new job is in a branch 220 miles away from his current job.Whilst his employer may offer him this alternative role, this would not be suitable alternative employment for the purposes of redundancy pay as it necessitates him moving house. If he turned down this offer of an alternative job, he would still be entitled to Statutory Redundancy Pay.

Re-training after redundancy

There are several different ways for you to finance re-training in order to obtain work after you have been made redundant. Which one is most appropriate will depend upon the training you want to undertake and the amount of savings or income you have.

1) Loans
Loans must be paid back at some time in the future. There are however professional or career development loans offered by many banks which have preferential rates to other loan products offered. Professional or career development loans allow you to borrow anything from £300 to £10,000 regardless of your savings or income. You will also not have to start repaying your loan until after you finish your course.

You can find out which banks offer Professional or career development loans by contacting the National Careers Service on 0800 100 900.

2) Grants and bursaries
You do not have to pay back grants or bursaries, which are available from a number of sources, including the government, charities, or your college. A search for any grants available to you can be made here. Grants are also available to assist with living expenses. Most grants are means tested.

3) Apprenticeships
For anyone aged 16 or over, an apprenticeship can be a beneficial way to move into a new career as these allow you to earn money whilst you are training. Many companies taking on apprentices will also then hire at least some of their apprentices.

An apprentice will usually work alongside experienced professionals, learning job-specific skills, as well as studying approximately 1 day per week. There are three levels of apprenticeship in the UK:

  • Intermediate (equivalent to 5 GCSEs)
  • Advanced (equivalent to 2 A levels)
  • Higher (equivalent to a Foundation Level Degree)

You can search for available apprenticeships and apply here

After redundancy

When you have been made redundant, if you do not immediately have a new job, cash-flow can be a problem. Don't forget that you can get help from the government or your local authority. This assistance includes:
  • Job Seekers Allowance
  • Housing Benefit
  • Council Tax Reduction
  • Free school meals
  • Assistance with NHS costs

For advice on what benefits or assistance may be available to you, and help in applying for assistance, speak to your local Citizens Advice Bureau who will be able to give you free advice.

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[Add a Comment]
Obioma Ahuruonye - Your Question:
I have just been told today that I am being made redundant as 65% of my role is disappearing. The percentage of my job has been worked out by others but the 35% is going to be done by another team. My job is a publication marketing executive. Before my first meeting today when I was told about this I have been reassured repeatedly that my position is safe. I was even told that they had just employed a new publications manager. I have repeatedly tried to do more work and was even advised by the senior line manager that if I do certain tasks that this would work in my favour. I had started to do this but a week ago, I was told to stop. There is something in me that this is like constructive dismissal can you advise. I have my first consultation meeting really soon. Thanks

Our Response:
I can only point you in the general direction of this CAB link here which explains what constitutes a fair redundancy in greater depth. I think in this instance I would also give ACAS a call in order to find out further whether your company redundnacy is fair or not, as from what you say it does sound slightly ambiguous.
RedundancyExpert - 3-Aug-17 @ 10:48 AM
I have just been told today that I am being made redundant as 65% of my role is disappearing. The percentage of my job has been worked out by others but the 35% is going to be done by another team. My job is a publication marketing executive. Before my first meeting today when I was told about this I have been reassured repeatedly that my position is safe. I was even told that they had just employed a new publications manager. I have repeatedly tried to do more work and was even advised by the senior line manager that if I do certain tasks that this would work in my favour. I had started to do this but a week ago, I was told to stop. There is something in me that this is like constructive dismissal can you advise. I have my first consultation meeting really soon. Thanks
Obioma Ahuruonye - 1-Aug-17 @ 6:41 PM
Deanipher - Your Question:
Good afternoon, previously as an apprentice in 2009 I was made redundant alongside another apprentice at my old company due to lack of work and the company couldn't afford to pay me. I do work for the provider who supplies the training and aware I was unfairly dismissed and even more so because they have hired further apprentices since I left. Just wondering if there is anything I can do legally about this situation

Our Response:
I order to find out whether your employer has actually contravened employment law guidelines, you would have to give Acas a call. An adviser will help you explore your rights and options - please see link here.
RedundancyExpert - 29-Mar-17 @ 10:30 AM
Good afternoon, previously as an apprentice in 2009 I was made redundant alongside another apprentice at my old company due to lack of work and the company couldn't afford to pay me. I do work for the provider who supplies the training and aware I was unfairly dismissed and even more so because they have hired further apprentices since I left. Just wondering if there is anything I can do legally about this situation
Deanipher - 28-Mar-17 @ 1:45 PM
My husband's employer has advised him he is being made redundant. The job is not disappearing, however they have offered the work to a self-employed husband and wife team who previously worked for them. They will work 2 days per week, plus they have offered a further 2 days work to someone who is currently on an expenses paid training scheme with them at the moment. That scheme is due to end and they have offered the 2 days on a permanent basis ... all doing the job my husband presently does in a 5 day week. They have also asked an existing member of staff if he would consider becoming self-employed. We are in tied accommodation and therefore have been given notice to leave that too. We have, however, discovered today that the husband and wife team will be moving into this accommodation when we vacate it. My husband has worked in this role for over 20 years. The business was sold as a going concern 5 years ago and it is the new owners who have made the decision on redundancy. He has never been subject to any sort of disciplinary action and has probably had less than 2 weeks sickness in the duration of his employment. I feel we may have a case for unfair dismissal. Any thoughts?
Samim - 25-Jan-16 @ 7:44 PM
Hi I am 65 in Jan 2016 but as yet have not submitted my resignation. This week I have been told that under TUPImy job is being transferred to another company. Would I be able to claim redundancy as I don't want to transfer to the new company? Many thanks Peter
Jonesy - 27-Oct-15 @ 7:08 PM
I am in the process of being made redundant, as my site is closing and relocating 200 miles away. The past two weeks I have been on accrued holiday, and during that time the company has been having one to one consultations with the staff. I am due to start back next Monday and due to have my one to one consultation with the HR manager next Tuesday. This current week whilst I have been on holiday my employer has phoned me and informed me that when I go back on Monday I will be training my replacement. My manager knows that I will not relocate to wales, but I have not confirmed this to the HR manager responsible for redundancies, whom I'm meeting with on Tuesday and I would then. Is what they have actioned legal? To say I'm a bit aggrieved is putting it lightly. Any advice is welcome, thank you.
Stevie - 9-Sep-15 @ 8:29 PM
@Lee - In response to your question:
"I was unhappy at work and asked if there was a possibility of redundancy and was told no. No one was being made redundant, I have worked for this company for ten years. The day after I gave in my notice we were told that 20 of us were being made redundant. I went to HR with my manager, we were both angry as we were mislead. The company are saying they did not know and so are HR and its my work against theirs so I cant get any payment. Is this correct or do I have a case? "

This is very unfortunate for you. I think in this case you should give ACAS a call and talk to someone directly to see if they can advise further. I assume your company must have known as decisions over redundancy don't happen overnight. However,I could not advise whether you have any recourse to claim.
RedundancyExpert - 5-Aug-15 @ 2:44 PM
I was unhappy at work and asked if there was a possibility of redundancy and was told no. No one was being made redundant, I have worked for this company for ten years. The day after I gave in my notice we were told that 20 of us were being made redundant. I went to HR with my manager, we were both angry as we were mislead. The company are saying they did not know and so are HR and its my work against theirs so I cant get any payment. Is this correct or do I have a case?
Lee - 4-Aug-15 @ 10:34 AM
@S. Louise - It sounds like if you are the only one that does your job your employer is likely to want to keep you. It will ultimately be your employer that decides who they are willing to offer voluntary redundancy to. If your job is one of a kind it is less likely they will want to part with your skills, unless off course they are not needed anymore. Please keep in mind that if you do apply for voluntary redundancy without it being offered and are unsuccessful it may lead to an uncomfortable working atmosphere, as they know you want to leave. I hope this helps.
RedundancyExpert - 30-Apr-15 @ 1:40 PM
@S.Louise - if your job is not under threat then there is still a need for your position.If you are the only one that does your job your employer is likely to want to keep you. You would have to wait to see if your company announced voluntary redundancy in your department.
Jan - 30-Apr-15 @ 1:02 PM
In my current employment for 14 years within the third sector. Organisation is facing financial difficulties due to funding cuts. Redundancies/redeployment have been announced. My job remains "safe" for now however, I'd willingly take redundancy. Should I volunteer? It might save the jobs of those facing redundancy or redeployment. I am a front line worker who delivers service and was told I'm "cheap" to keep in post.
S.Louise - 27-Apr-15 @ 4:39 PM
@kathys I can understand your frustration as it is never easy to lose your job, at the same time it is always a difficult task for an employer to have to let staff go. It doesn't sound as if your employer was being too harsh in their approach as it was conducted privately and behind closed doors. Redundancy notices are not generally delivered in the home but in the place of work. Employers should explain the reasons why the employee's job will no longer exist, give employees reasonable time off to look for a new job or arrange training and employers must try to find suitable alternative employment within the organisation for employees they've made redundant. Of course you are entitled to your opinion about their approach and hopefully they will take that on board in the future. I hope this helps.
RedundancyExpert - 15-Oct-14 @ 11:56 AM
I have enjoyed reading the information regarding redundancy. I have been seriously affected after being made redundant in December 2012. I would love to know the actual method employers should use to tell affected employees - phone them on their personal phone and ask to come to their home to discuss? At my workplace the PA was sent upstairs to tell the three of us that the Dean wanted to make an appointment to see us that day. My colleagues and I were all watching whose office she went into.This was very stressful and upsetting for us. I felt there was no privacy and respect for us.Love to hear your opinion. I am writing to management suggesting that don't use this method again should there be further redundancies.Kathy
kathys - 15-Oct-14 @ 11:54 AM
I have enjoyed reading the information regarding redundancy.I have been seriously affected after being made redundant in December 2012. I would love to know the actual method employers should use to tell affected employees - phone them on their personal phone and ask to come to their home to discuss?At my workplace the PA was sent upstairs to tell the three of us that the Dean wanted to make an appointment to see us that day.My colleagues and I were all watching whose office she went into.This was very stressful and upsetting for us.I felt there was no privacy and respect for us. Love to hear your opinion.I am writing to management suggesting that don't use this method again should there be further redundancies. Kathy
kathys - 15-Oct-14 @ 7:39 AM
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