I Forfeited My Redundancy Pay for New Job: A Case Study

Author: Natalie Martin

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.

If you're facing redundancy and unsure about how a new job offer might affect your entitlements, you can get tailored guidance using our free Redundancy Action Plan.

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.

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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.

Your situation may be slightly different. ask a question below ↓ and our editorial team will reply with our advice.

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.

The Next Step

Now that you have read through the advice above, you might want to put it into practice. Our Redundancy Pay Calculator lets you 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 it now →

Showing 20 of 23 questions

Ask Redundancy Expert a Question

jon 03/02/2021 at 4:03 pm

hi i left my job after 10 years started a new job, i was away about 4 month i ended up going back to my original job am i still entitled to my redundancy from my first job? thank you

Go4light 19/10/2020 at 1:04 pm

I have been with the Estate for 16 years, got attacks of Anxiety whilst put on furlough and have not heard from my Employer, finally the Pressure got so strong, I did not want to be a Burden and asked to leave , what my Employer accepted for the 30/09/20. On the 01/10/20 the Company offered voluntary redundancies for all staff, I feel badly left out, can I do anything?

Bazza 14/08/2020 at 3:32 pm

I have recently been made redundant, and I have been offered my redundancy package, the consultation was unfair and the scoring unfair, my first line of appeal would of been to a director who would of been a conflict of interest to the process. So I didn’t appeal on those grounds as I didn’t want it delaying my redundancy package. If I apply to acas for unfair redundancy on the grounds above can my Ex company withhold my payout? I have no intention of wanting my job back as I would have to work under the same management who have got rid of me.

Ann 19/06/2020 at 6:15 pm

The company I worked for for 9 yrs has been put into administration and I was told without notice I was redundant
I have put a claim in to the government for my redundancy and told it will take approx 6 weeks to get sorted
Can I start another job straight away if I am offered a position at a different firm or will this affect my redundancy claim

Tt 04/02/2020 at 9:40 pm

The company I work for has gone into liquidation, I have been there for 6 years and was given 2 weeks notice that I was being made redundant. I have secured a new job to start 1 week after my previous job ended, however as it is technically still in my notice period am I still able to claim redundancy and notice pay?

Donna McDougall 15/11/2019 at 6:44 pm

I took voluntary redundancy at the age of 56 after 18 years of service with The City of Edinburgh Council. I took a lump sum from my pension payout of 30,000 and an annual payout of 5,000. This gives me a monthly pay of 417.00. My redundancy payout was 20,000. As I am currently looking for work and have been employed all my life paying tax and NI, am I able to claim any benefits while I am looking for work?

ConfusedEmployee 01/05/2019 at 3:12 pm

I know (unofficially!) that I am about to be put on a list of employees who will be made redundant in the next month. My office in the North of England is being shut down and I can't relocate to London so I will be made redundant.

I have 20 years with the company so the redundancy package is not insignificant and also a three-month notice period.

I expect the consultation to start in the next week or two but my question is, realistically, how soon could I accept a new job offer, starting after my leaving date, without jeopardising my redundancy payout.

If I accept during consultation, I assume this would lead me to forfeit any payout.

Simsy 13/11/2018 at 12:41 am

If serving my redundancy notice period (already given finishing date), my employer now says they now have work for me. Can I still accept the redundancy or do I have to accept their offer of employment.
Many thanks for any help you can give me regarding this matter.
Simsy

Banta, 08/10/2018 at 2:09 pm

I am taking voluntary redundancy which is just under the £30k mark, so as I'm aware that I won't get taxed. I am due to leave my company on 31 March 2019 and I get paid my redundancy in my March salary.
However, I am confused around tax if I was to start a new role, ideally, I'm looking to start a new job at the beginning of April. However, will my tax be impacted if I was to start a new role in April?

danish78 20/03/2018 at 1:29 pm

I was made redundant from a job I had worked in for 17 years when the company became insolvent in early Feb. I did not receive any notice or enter into consultation, it just happened one day. I claimed Universal Credit while searching for a job. I found and started a new within 4 weeks.

I have now received my statutory redundancy pay but I am guessing I won't get anything for payment in lieu of notice? I would qualify for 12 weeks given my service but by the time the 12 week period is up I will have had some Universal Credit AND potentially two months salary (I earn more than £489 so this would be capped).

Is it just a straight "what you are entitled to minus amount you have earned in the 12 weeks" calculation? It seems a bit unfair to not receive anything just because I cracked on and returned to work as quickly as I could.

RedundancyExpert Editor 25/01/2018 at 11:50 am

Unfortunately, we cannot possibly advise on such a personal decision. Making her qualification the priority may be her best option to keep in mind. It's great your girlfriend has lots of opportunities. It's a matter of giving the pros and cons of each and coming to the final decision herself.

Kipsy 24/01/2018 at 6:25 pm

My girlfriend has been offered a new job at the very respectable BNP Paribas.
When she came to hand her notice in the CEO of her current employee stated that she was going to be made redundant with just over £5000 package.
To add to the matter it further complicates things because she will be finishing his summer with her level 3 in accountancy , in which she is line for a merit at least or distinction.
The dilemma is should she turn down a job with lots of room for progression , take the package look at temping / she has also been given the opportunity to work for partner company but is based over 40 miles away ? Please any info will be greatly appreciated

RedundancyExpert Editor 31/10/2017 at 2:52 pm

You may lose your right to statutory redundancy pay if you unreasonably turn down suitable alternative employment

Wardis 27/10/2017 at 2:46 pm

I am currently within a 30 day consultation period with my company. I do not wish to apply for the position offered therefore I understand this would put me at risk of redundancy.

1st Day of consultation: 16th October (30 days from this date).

I have secured myself another job (27/10/2017) but I have yet to inform my current employer, would like be lenient and let me go after the 30 days consultation is up and still receive my redundancy pay?

I personally see no point hanging around. Especially this close before Christmas.

My question is, this is how I am thinking it will go, but what are your thoughts? I shall speak to HR on Monday 30th October to inform them I shall not be applying for the position.

Regards
Sean

AF 29/03/2017 at 8:55 pm

Hi, I have handed in my notice and I have 2 weeks left to work of my notice period, however, everyone is likely to be made redundant before my notice period ends. Am I still entitled to my redundancy money?

Frustratedexemployee 30/12/2016 at 11:27 am

Hi. I wax made redundant after 26 years and left my job on 8th Dec 16. My ex employer advised all of us (13 in total) that we could collect our redundancy payment by check on 30th Dec even though wages were always paid by BACs on 28th. Today is the 30th and we have been advised that there is no one available to sign the cheques and that we have to return on Tuesday 3rd Jan to collect. How long can he legally withhold this money. He also has not given any P45's.

Whitey 13/09/2016 at 2:53 pm

Hi,

I have been at my firm for 5 years and have opted to take voluntary redundancy the end of November 16. I was told of the consultation period in May of which I found I was at risk and decided and agreed I would leave the end of 30 November-16.

However, I have since secured employment of a new job with a start date oft he 3rd October. I had my notice period approved by HR and a letter of accepting from my current firm accepting my leave date. No mention of any redundancy payment in full or even part payment.

However during the time this began and my leave date up until todays date, the whole idea of me leaving in Nov-16 was to make sure a smooth hand over of information to an outsourced company was delivered. I believe I have done that, as I am still employed in the company, and due to other members of my department leaving would not have been allowed to leave before my agreed end date of 30th November 16.

Therefore my question is, am I entitled to some sort of redundancy payment? I have fulfilled the requirements of the redundancy situation up until my leave date and the transfer of work to the newly outsourced company has already begun... But not the agreed date on my offer (which was subject to change anyway). Therefore feel and deem it un-fair that I should lose all of a large part of what was agreed previously.

Any thoughts on this situation?

Thanks

David

Jamie Thomson 03/09/2016 at 11:56 am

My notice period (2 weeks) ends 2 days after I start work. will I lose my notice pay? I actually left the company more 3 weeks ago.

Jintyb 19/04/2016 at 7:19 pm

I have been with my current employer for the last 13 years and have been informed my job will no longer exist due to restructure, therefore I will receive my redundancy notice in 2 months which will then follow with a 3 month redundancy notice. My question is, will I still receive the redundancy pay I am due if I am offered a job prior to recieving the official redundancy notice. I would only hand in my notice (if offered another job) after recieving the redundancy notice, however, I wanted to check if there were any risks of me losing my redundancy pay from accepting/being officially offered a job before this notice had been given to me.

RedundancyExpert Editor 29/02/2016 at 2:56 pm

While you are entitled to apply for the redundancy and may wish to apply for the same job you were doing, there is no guarantee you may get your old job back. This is where the risk comes in and much depends on whether you can get a job easily, if you don't get your old job back. It may be worth you doing some research on how long your redundancy money may last once you come out of work and how easy you feel it may be to get a job in the same or similar field.

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