Finding a new job shortly after being made redundant is something to celebrate, but if this means you lose some or all of your redundancy money this celebration can sometimes turn into misery.

Depending on how long you have been with a firm, most employers will offer you some form of redundancy pay, which in some cases follows on from a considerable period of consultation or gardening leave as it is commonly referred to. Problems can occur if you manage to find other employment within this consultation period, as this could make your redundancy invalid.

Being Made Redundant

Stephen was 31 and had been working at a bank for just over two years. He was shocked one day to be told that he was being put into consultation, which meant his current job had been made redundant but they were trying to find him employment elsewhere in the business.

“When I got the news, my initial reaction was to panic, I had a wife and a young child and I needed to keep the money coming in. Even though I was only in consultation I knew the writing was on the wall and that I was not going to be offered another job,” explains Stephen.

He was offered quite a generous redundancy packet and on top of his three months consultation period he was also offered three months redundancy pay.

“I knew I would be financially OK for at least another six months and this was reassuring,” he says.

Searching For a New Job

“I started looking for work straight away, it didn’t even cross my mind to think about what would happen to my redundancy money if I found another job,” says Stephen.

After several interviews Stephen was offered another job within one month.

“It was working at another bank and although the money was not as good as it was at my old job, I felt a weight had been lifted off my shoulders because I had found a new job.” explains Stephen.

He was on quite good terms with his old boss so he went to speak to him about the new role he had been offered. At first they had an informal chat about what would happen to his redundancy pay if he took on the new role.

“The new bank wanted me to start work within the month, which meant I would be starting employment one month before my current employment had ended which my employer said would mean I would lose all of my redundancy pay,” says Stephen.

Making a Decision

“The redundancy money I was being offered was not a small amount, it was three months of my wage and to receive it all I would have to do was to wait until the day my consultation period ended.

“On the other hand I did not want to risk not being able to find another job or losing the one I had been offered simply to receive my three months redundancy pay,” explains Stephen. In the end Stephen decided he would take the new job and forfeit his redundancy package.

“I always thought it would be a bonus to receive the redundancy pay and get a new job and the most important thing to me was always to find a new job as that offered longer term security,” he says.

It can be tricky deciding whether to accept a new job or to stick it out and receive your redundancy pay. You should weight up which option will be better financially. If you are forfeiting your redundancy pay for a job that only has a six month contract this may not be worth it. But if your dream job comes along then it would not be wise to let this slip by simply to gain a few months redundancy pay.