Redundancy: know your rights

As a result of the coronavirus pandemic, it’s a grim fact that redundancy is now an ever present reality. As businesses try to survive, many are being forced to make some employees redundant. Between March and June this year, 649,000 people fell from company payrolls.

With that in mind, if you have been made redundant, you’re concerned you might be, or even if your job feels relatively safe right now, it’s important to know your rights and what it is you’re entitled to.

The minimum payment you should receive will vary. We’ve put together everything you need to know so you can work out how much you will receive.

Your redundancy pay

The amount of redundancy you receive can change depending on different factors. The main factors are your age and the amount of time you’ve been working for your current employer.

Age group entitlements:

• half a week’s wage for every year you were under 22
• one week’s wage for every year you were between 22 and 41 years of age
• one and a half week’s wage for ever year you were over 41

For example:

If you joined a business and worked a full year from the age of 21 to 22, and have worked three more since turning 22, you would be entitled to three and a half weeks redundancy pay.

The weekly amount you will receive is based on the average you earned over the last 12 weeks before you received your redundancy notice. If you were furloughed before you were made redundant, your weekly amount will be calculated on what you would normally earn.

You can use this government website to calculate your minimum redundancy amount you’re entitled to.

Who isn’t entitled to redundancy pay

There are some kinds of jobs and certain scenarios where you will not be entitled to redundancy.

You won’t be entitled to redundancy if:

• Your employer offers to keep you on
• You are dismissed for misconduct
• Your employer offers you suitable alternative work

If you hold certain jobs you won’t be entitled to redundancy pay:

• former registered dock workers and share fishermen
• crown servants, members of the police or armed forces
• apprentices who won’t be employees at the end of their training
• domestic servants who are a member of their employee’s immediate family

Your consultation and notice period

Before your notice period begins, your employer should notify you of their intention to make you redundant and a period of consultation should begin.

As the redundancy pay you will receive varies from person to person, so does the consultation period you’re entitled to.

The consultation gives your employer the opportunity to tell you what is going on, and you to ask questions and give your point of view.

Some of the points your employer should cover are the following:

• If there are any alternatives to redundancy
• Consider ways to reduce the number of redundancies
• If they can reduce the impact of redundancy

The consultation period, and the way in which it is carried out varies depending on how many people are being made redundant.

Less than 20 people – There are no rules on the consultation period. However, your employers should consult you individually and give a reasonable timescale in which to do this.
20 to 99 people – A collective consultation must take place between your employer and a union rep or an elected employee representative 30 days before dismissal.
100+ people – A collective consultation must take place between your employer and a union rep or an elected employee representative 45 days before dismissal.

Your notice period

Once the consultation period has finished, your notice period will begin. The length of notice owed to you is between one and 12 weeks depending on your length of service:

One week – if you’ve worked for the business for less than two years
Two to 12 weeks – you’ll receive one week’s notice for each year you’ve been employed between two and twelve years.
12 weeks – if you’ve worked for your employer

During your notice period you will be entitled to take off up to 40% of your working week. For example, if you work a five day week, you’re entitled to take two days off to look for work. If you need more time, discuss it with your employers. Given the circumstances, some may be willing to allow more.

Redundancy and your debt solution

If you’re being made redundant, let us know as soon as you can. We will do everything we can to help and notify your lenders of the situation.

Our IVA customers should keep in mind that there is a windfall clause written into the terms of their contract. Please don’t worry about this and we can discuss this with you in more detail. However, if you were to find work immediately following being made redundant, some of your redundancy may need to be paid into the IVA.