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.