Your Rights If You Are Made Redundant While Off Sick

Being made redundant is stressful at the best of times. When you're off sick, the situation becomes even more complicated. Many people worry their employer might use their absence as an excuse to get rid of them, or that being ill somehow weakens their position.

Your employer can make you redundant while you're off sick, but they have to follow the same rules as they would if you were at work. Your illness doesn't strip away your employment rights, and in some cases, you might have extra protection.

The redundancy process still applies

Your employer must have a genuine redundancy situation. This means the business is closing, your workplace is closing, or fewer employees are needed to do the work. They can't use redundancy as a convenient way to dismiss someone who's been off sick.

The usual redundancy procedures apply whether you're ill or not. Your employer should consult with you, consider alternatives to redundancy, and use fair selection criteria if they're choosing between employees. They must also give you proper notice and pay any redundancy money you're entitled to.

If your employer rushes through your redundancy without proper consultation, or appears to target you because of your sickness absence, you might have grounds for unfair dismissal. Selection criteria that penalise absence could be discriminatory, particularly if your absence relates to a disability.

What happens to sick pay

Statutory Sick Pay (SSP) stops when your employment ends. If you're receiving SSP when you're made redundant, your last payment will be on your final day of employment. This applies even if you're still too ill to work and would have continued receiving SSP if you'd kept your job.

Some employers pay company sick pay above the statutory minimum. Check your contract to see what happens to this when you leave. In most cases, it stops when your employment ends, just like SSP.

After your job ends, you might be able to claim Employment and Support Allowance (ESA) or Universal Credit if you're still too ill to work. ESA is specifically for people who have a disability or health condition that affects how much they can work. Universal Credit may include additional support if you have limited capability for work. The rules for these benefits are complex and change regularly, so check the current position on GOV.UK or get advice from Citizens Advice.

Notice periods and pay

Your employer must give you proper notice of redundancy. The minimum is one week's notice for each complete year you've worked there, up to a maximum of 12 weeks. Your contract might specify longer notice.

You're entitled to be paid during your notice period. If you're off sick during this time, you should receive your normal sick pay arrangements, whether that's SSP or company sick pay. Your employer can't reduce your notice pay just because you're ill.

Some employers prefer to make a payment in lieu of notice (PILON) instead of having you work your notice period. If they do this, you'll get a lump sum equal to what you would have earned during the notice period. The tax treatment of PILON can be complicated, and the rules have changed in recent years.

Redundancy pay calculations

Being off sick shouldn't affect your redundancy pay calculation. The payment is based on your age, weekly pay and length of service, not on whether you're currently at work.

The calculation uses your gross weekly pay before you went off sick. If you've been receiving reduced pay due to illness, your redundancy payment should still be based on your normal wages. The weekly amount is capped at a statutory limit which changes each year.

You need at least two years' continuous service to qualify for redundancy pay. The standard calculation gives you half a week's pay for each full year worked when under 22, one week's pay for each full year worked between 22 and 40, and one and a half week's pay for each full year worked when 41 or older. Length of service is capped at 20 years for this calculation, though your employer might offer more generous terms.

When redundancy might be unfair

If your employer seems to be using redundancy to get rid of you because you've been ill, you might have an unfair dismissal claim. Warning signs include being selected for redundancy when colleagues doing similar work are kept on, or your employer suddenly deciding your role is redundant shortly after you go off sick.

Dismissal for a reason connected to health can be fair in some circumstances, but your employer must follow proper procedures. They should get medical evidence, often through an Occupational Health assessment, to understand your condition and likely return to work date. They should consider adjustments to help you return to work and look at whether you might be able to do a different role. Simply making you redundant to avoid dealing with your sickness is likely to be unfair.

If your sickness amounts to a disability under the Equality Act 2010, you have additional protection. A disability is a physical or mental impairment that has a substantial and long-term adverse effect on your ability to carry out normal day-to-day activities. Long-term usually means lasting at least 12 months.

Your employer must not discriminate against you because of your disability. This includes in redundancy selection. If absence is used as a selection criterion, disability-related absence should usually be discounted. Your employer also has a duty to consider reasonable adjustments that might help you keep your job, which could include changes to the redundancy process itself to accommodate your disability.

Disability discrimination claims can be brought regardless of your length of service, and compensation is potentially unlimited. If you think you've been discriminated against, get advice quickly as there are strict time limits for bringing a claim.

Practical steps to protect yourself

Keep detailed records of all communications with your employer about both your sickness and the redundancy. Save emails, letters and any other documents. If meetings are held by phone or video while you're off sick, take notes during the conversation and write up a summary afterwards. Send this to your employer to confirm what was discussed.

Check whether your employer is following their own redundancy procedure as well as the legal requirements. Many employers have policies that go beyond the legal minimum, and they should stick to these.

If you're in a trade union, contact them immediately. They can advise on whether your redundancy appears genuine and can represent you in discussions with your employer. Union support can be particularly valuable when you're dealing with redundancy while unwell.

You might want to try negotiating with your employer, particularly if you suspect the redundancy isn't genuine. Some employers will agree to a settlement agreement which includes an enhanced payment in return for you agreeing not to bring any claims. Before signing any settlement agreement, get independent legal advice. This is actually a legal requirement for the agreement to be valid, and your employer will usually contribute to the cost of getting this advice.

Essential time limits for claims

If you think your redundancy is unfair, you generally have three months less one day from the date your employment ends to start Early Conciliation with ACAS. This is a free service that tries to resolve disputes without going to tribunal. You must go through this process before you can bring an employment tribunal claim.

ACAS can also help through mediation or arbitration if both you and your employer agree to try these routes. These alternatives to tribunal can be less stressful and quicker than formal proceedings.

Don't delay getting advice because you're still unwell. Missing the deadline usually means losing your right to claim, regardless of how strong your case is. Free advice is available from ACAS, Citizens Advice, and sometimes from law centres or your union.

Being made redundant while off sick adds extra stress to an already difficult situation. The combination of health worries and job loss can feel overwhelming. Remember that your employment rights continue to protect you, and support is available both for the legal aspects and for your wellbeing. If something doesn't feel right about how your redundancy is being handled, trust your instincts and seek advice promptly.

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 →