Being offered a new job when you are facing redundancy can feel like a stroke of luck. The worry about how to pay the bills starts to lift, and you can see a way forward. At the same time, a new role can raise questions about your redundancy pay and whether you still qualify for it.
Typically, finding a new job elsewhere does not affect your statutory redundancy entitlement. There are situations where it might, though, so it pays to understand the rules before you sign anything. Before making any decisions, it is worth working out what you are owed using our free Redundancy Pay Calculator.
Does a new job cancel out your redundancy pay?
Under UK law, if you have been made redundant by your current employer and you find work with a different company, your statutory redundancy pay is not affected. You earned that money based on your service with the employer who is letting you go, and starting somewhere new does not change that.
The picture can be different if the new role is with the same employer, an associated company, or a business that has taken over your old workplace. In those cases, the rules around suitable alternative employment come into play, and your redundancy pay may be at risk.
Find out how much statutory redundancy pay you could be entitled to. Enter your details and get an estimate in less than a minute.
Try our Redundancy Pay Calculator free, here on this site →Five questions to help you work out where you stand
The questions below cover the main areas that tend to affect whether redundancy money is safe.
1. When does your new job start?
- A) I can choose my start date
- B) Not for a couple of months
- C) Straight away
Timing matters because you are usually expected to work your notice period with your current employer. If your new employer is happy to wait, or to be flexible about your start date, this is the easiest position to be in. Starting immediately can sometimes mean leaving before your notice ends, which may affect part of your payment if you are not careful. Check what your contract says about notice and speak to your current employer about how they want to handle it.
2. Have you already been paid your redundancy money?
- A) I have already received it in full
- B) I am waiting a couple of weeks
- C) I am still technically employed and have a wait ahead
Once your statutory redundancy payment has been made, it is generally yours to keep. An employer cannot ask for it back simply because you found work quickly, although disputes can arise in unusual circumstances. If you are still waiting for the payment or are still in your notice period, your situation is slightly less settled, although the money will usually be paid as expected. If you have any concerns about timing, ask HR for a clear date in writing.
3. Are you in a consultation period?
- A) No, I went straight into redundancy
- B) I have a one month consultation
- C) I am in a consultation lasting a couple of months
Consultation is the period when your employer discusses the proposed redundancy with you and looks at alternatives. If you accept a new job elsewhere during consultation and resign before being formally made redundant, you may lose your right to a redundancy payment, because technically you are leaving rather than being dismissed. If you find a new role during consultation, the safer route is usually to talk to your employer about being released early under the redundancy, rather than handing in your notice in the usual way. There are specific rules that allow you to leave early during the notice period without losing your payment, but the process needs to be followed properly.
4. Did you volunteer for redundancy?
- A) Yes, I took voluntary redundancy
- B) No, I was not given the option
- C) I was offered it but turned it down
Volunteering for redundancy does not stop you receiving statutory redundancy pay, provided you have at least two years of continuous service and meet the usual criteria. Some employers also offer enhanced packages for those who volunteer. If you turned down voluntary redundancy and were later selected anyway, your entitlement is the same as anyone else who has been made redundant.
5. Is the new job with the same company?
- A) No, it is with a different company
- B) It is in a different part of the same company
- C) It is within the same company
This is where things can get more complicated. If your employer, or an associated employer, offers you suitable alternative employment and you unreasonably refuse it, you can lose your right to statutory redundancy pay. What counts as suitable depends on the pay, hours, location, status and the type of work compared to your old role. Under the Employment Rights Act 1996, you are entitled to a four week trial period in the new role, and if it turns out not to be suitable, your redundancy pay should still stand. Where the new role is with a completely separate employer, none of this applies.
Your situation may be slightly different. ask a question below ↓ and our editorial team will reply with our advice.
Making sense of your answers
If most of your answers fell into the A category, your redundancy pay is likely to be safe. You have flexibility on your start date, your money has either been paid or is on its way, and the new role is with a different employer. In that situation you can usually take the new job without worrying about losing what you are owed.
If your answers were a mix of B and C responses, take a closer look before accepting anything. The main risk areas are leaving during consultation, turning down a suitable alternative role with the same employer, or starting a new job before your notice ends without your employer's agreement.
Where to get further help
Redundancy rules can feel complex when you are trying to weigh up a job offer at the same time. For the current rules on statutory redundancy pay, the weekly pay cap, notice periods and tax treatment, GOV.UK is the most reliable source and is updated each April when the statutory limits change. ACAS also offers free guidance on redundancy and suitable alternative employment. If a lot of money is at stake, or your situation is unusual, it may be worth getting tailored advice from an employment solicitor or your trade union before you commit to anything.
They have catering franchises at several venues. They terminated the franchise which she worked for on 31st Dec 2020 as they could not agree terms with the golf club who owned the premises. She had already been on furlough for some time up to this point. They have continued to pay her through the furlough scheme ever since (which I thought strange) with no mention or offer of redundancy ever being discussed. ( right up to present day)
Now, with the lock down coming to an end, she has been offered a similar role in another restaurant owned by her employer's boyfriend. I am very suspicious that this is just a ploy to avoid having to pay her any redundancy package and that in a short while her new company boss will just get rid of her and claim she wasnt suitable.
My wife is so trusting that she doesnt see this as a move and will do as they ask. I am concerned she will not get any of the money to which I think she is entitled. What is your view?
My employer recently restructured and as part of that they offered up voluntary redundancy which would be about £40k so I opted in for VR.
This was several weeks ago and today I received my redundancy agreement which has a clause which states that as at the date of the agreement (today) I basically cannot have a job offer or be in discussions likely to lead to a job offer.
The company I will be joining is aware of me going through the VR process but want me to start in around 30-40 days. I have said I will accept the VR offer and then give them a start date and negotiate a leaving date with my current employer.
"“...at the date of this Agreement you have not commenced employment*nor are you in discussions which are likely to lead to nor have you agreed to accept nor received any offer of employment notwithstanding that you have taken all reasonable steps to obtain such employment.”
This very important piece of information was never communicated at any stage of the process and clearly anyone who has accepted their job will be ending will want to know they can secure further employment. So as a result I applied for and am now in receipt of a job offer (unsigned) which is due to start after the end of my notice period.
Now worried that this will affect my settlement agreement (which is non-negotiable) and I will end up on statutory redundancy which is only £10k.
One option would be to ignore the clause and assume it all goes through fine but is this a good plan?
- Is this clause normal?
- Is it unreasonable?
- Should I ignore it and hope for the best?
- Should I challenge it?
I now want to leave this job, and am currently in a 3-month probation period, due to end on 1st January. If I were to hand in my notice now, would I be eligible for the redundancy pay from my previous role?
Much thanks!
Do I get to keep my redundancy if I accept job.
I currently have two part time jobs with different employers. I have been given the option to take voluntary redundancy with one of them. Will I still qualify for redundancy even tho I already have another job?
Thanks
Have completed redundancy request online but now understand 12weeks notice pay I thought I would also get may be lost if I start a new job eg in 2 weeks!?
Is this correct?
I straight away started looking for a new job, I start my new Job on the 5th august.
However, mid between my 1st and 2nd interview with my new employer, it was announced that the business was now closing at the end of september.
Am I still entitled to redundancy pay?
Redundancy s indeed on cards and to keep 21st May in mind.
Can't take alternative job offer due to location and public transport.
I am now stuck waiting to see what is happening - what if sale has not gone through by 21st?
Am already looking for another job but, will lose out if find and take one.
What are my rights here? When does the definitive notice period begin for me to have any rights taking another job and, entitlement to my pay out?
Is it legal to be told I'm being made redundant but, could be anytime from now till whenever?
Thanks
TAZ
I have been offered a job starting as soon as possible not with education but with the NHS. Will this affect my redundancy payment.
Any advice, support or guidance.
Thanks
TAZ
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