Redundancy is a form of dismissal from your job. It happens when employers need to reduce their workforce.
If you’re being made redundant, you might be eligible for certain rights, including:
- redundancy pay
- a notice period
- a consultation with your employer
- the option to move into a different job
- time off to find a new job
You must be selected for redundancy in a fair way, eg because of your level of experience or capability to do the job.
You can’t be selected because of age, gender, or if you’re disabled or pregnant etc. If you are, this could be classed as an unfair dismissal.
Your employer should use a fair and objective way of selecting you for redundancy.
Commonly used methods are:
- last in, first out (employees with the shortest length of service are selected first)
- asking for volunteers (self-selection)
- disciplinary records
- staff appraisal markings, skills, qualifications and experience
If your job no longer exists, your employer can make you redundant without having to follow a selection process.
If your employer uses ‘last in, first out’, make sure it’s not discrimination, eg if only young people are made redundant.
Reapplying for your own job
You might be asked to reapply for your own job, which could help your employer decide who to select.
If you don’t apply or you’re unsuccessful in your application, you’ll still have a job until your employer makes you redundant.
You can’t be selected for the following reasons – your redundancy would be classed as an unfair dismissal:
- marital status
- sexual orientation
- religion or belief
- trade union membership
- health and safety activities
- working pattern (eg part-time or fixed-term employees)
- maternity leave, birth or pregnancy
- paternity leave, parental or dependants leave
- your membership or non-membership of a trade union
- you’re exercising your statutory rights
- whistleblowing (eg making disclosures about your employer’s wrongdoing)
- taking part in lawful industrial action lasting 12 weeks or less
- taking action on health and safety grounds
- doing jury service
- you’re the trusteeship of a company pension scheme
Appealing the decision
You can appeal if you feel that you’ve been unfairly selected. Write to your employer explaining the reasons.
You may be able to make a claim to anemployment tribunal for unfair dismissal.
If you volunteer for redundancy, it’s up to your employer whether they actually select you.
Your employer can’t just offer voluntary redundancy to age groups eligible for an early retirement package – this could be unlawful age discrimination.
However, an early retirement package (for certain age groups) could be one element of a voluntary redundancy offer open to all employees.
If you’re an apprentice and you’re worried about being made redundant talk to your manager an training provider.
Your training provider or the National Apprenticeship Service might be able to help you find another employer to help you complete your apprenticeship.
If you’re an employee and you’ve been working for your current employer for 2 years or more, you’ll be entitled to statutory redundancy pay.
- half a week’s pay for each full year you were under 22
- 1 week’s pay for each full year you were 22 or older, but under 41
- 1 and half week’s pay for each full year you were 41 or older
Redundancy pay (including any severance pay) under £30,000 is not taxable.
You’re not entitled to statutory redundancy pay if:
- your employer offers to keep you on
- your employer offers you suitable alternative work which you refuse without good reason
Being dismissed for misconduct doesn’t count as redundancy, so you wouldn’t get redundancy pay if this happened.
If you fall into the following categories then you’re not entitled to statutory redundancy pay:
- members of the armed forces
- House of Lords and House of Commons staff
- some apprentices – although you should check your contract
- domestic servants working in private homes who are members of the employer’s immediate close family
- ‘share fishermen’ paid only by a share in the proceeds of the catch
- Crown servants or employees in a public office
- employees of the government of an overseas territory
Short-term and temporary lay-offs
You can claim statutory redundancy pay if you’re eligible and you’ve been temporarily laid off (without pay or less than half a week’s pay) for either:
- more than 4 weeks in a row
- more than 6 non-consecutive weeks in a 13 week period
- Write to your employer telling them you intend to claim statutory redundancy pay. This must be done within 4 weeks of your last non-working day in the 4 or 6 week period.
- If your employer doesn’t reject your claim within 7 days of receiving it, write to your employer again giving them your notice.
Your claim could be rejected if your normal work is likely to start within 4 weeks and continue for at least 13 weeks.
You must be given a notice period before your employment ends.
The statutory redundancy notice periods are:
- at least 1 week’s notice if employed between 1 month and 2 years
- 1 week’s notice for each year if employed between 2 and 12 years
- 12 weeks’ notice if employed for 12 years or more
Check your contract. Your employer may give you more than the statutory minimum, but they can’t give you less.
As well as statutory redundancy pay, your employer should either:
- pay you through your notice period
- pay you in lieu of notice depending on your circumstances
Payment in lieu of notice
Payment in lieu of notice is money paid to you by your employer as an alternative to being given your full notice.
This means that your contract can be ended without any notice.
You must get all of the basic pay you would have received during the notice period, plus any extras you might be owed, eg pension contributions or private health care insurance.
To do this you must have a payment in lieu of notice clause in your employment contract.
If you’re being made redundant, you’re entitled to a consultation with your employer. This involves speaking to them about:
- why you’re being made redundant
- any alternatives to redundancy
You can make a claim to an employment tribunalif your employer doesn’t consult properly (eg if they start late, don’t consult properly or don’t consult at all).
If your employer is making 20 or more employeesredundant at the same time, the consultation should take place between your employer and a representative (rep).
This will either be:
- a trade union rep (if you’re represented by a trade union)
- an elected employee rep (if you’re not represented by a trade union, or if your employer doesn’t recognise your trade union)
Collective consultations must cover:
- ways to avoid redundancies
- the reasons for redundancies
- how to keep the number of dismissals to a minimum
- how to limit the effects for employees involved, eg by offering retraining
Length of consultation
There’s no time limit for how long the period of consultation should be, but the minimum is:
- 20 to 99 redundancies – the consultation must start at least 30 days before any dismissals take effect
- 100 or more redundancies – the consultation must start at least 90 days before any dismissals take effect
Electing employee reps
If you’re an employee affected by the proposed redundancies you can:
- stand for election as an employee rep
- vote for other reps