Your rights in redundancy
What happens I am made redundant?
If your employer makes you redundant then you are entitled to work out your notice period, go on paid 'gardening leave', or receive pay in lieu of notice. You will need to consult with your written contract of employment to ascertain your contractual notice period when your employment is terminated.
If you lose your job as a result of redundancy, you may leave early by agreement with your employer and still be eligible for a payment. And for employees on a fixed-term contract – which comes to an end but isn't renewed - this also counts as a dismissal and the employee could be due some redundancy remuneration.
All employers have to follow a recognised procedure. Before any redundancies are made an employer needs to explain why in writing. They are also required to hold a meeting with the employee and a representative to discuss the situation, and hold an appeal meeting if you wish to contest the redundancy.
You should be allowed to bring a colleague with you to these discussions. If a firm or organisation is making more than 20 people redundant within a 90-day period your trade union or another representative should be consulted before anyone is given notice.
Always check your employment contract and speak to any relevant unions or other representatives to find out what is common practice.
HOW MUCH MONEY SHOULD YOU RECEIVE?
Your employer may have its own terms of redundancy but all employees are at least entitled to redundancy pay if they have worked for their employer for at least two complete years.
Typically, employers have a redundancy policy which sets out their entitlement to redundancy pay and in many cases this will be superior to the legal minimum.
Most employers will offer at least two weeks for every complete year of service, some will offer more and if it is clear that you must leave it is important that you try and negotiate the best offer you can.
Of course to receive redundancy payment, you must have been made redundant, you cannot resign. Sometimes employers request voluntary redundancies, and just because you apply, this does not necessarily mean you will receive it – after all, your particular role may not be under threat.
The initial £30,000 of your redundancy pay package is free from the taxman's claws but many companies, especially in the case of smaller firms, only pay statutory redundancy pay.
Statutory redundancy pay depends on your length of service, your age and your weekly pay - up to a limit of £330 (£350 from 1 February 2009).
Your minimum redundancy pay entitlements are as follows:
- Half a week's pay for each complete year of service below the age of 22
- One week's pay for each year between 22 and 40; and
One and a half week's pay for each year above the age of 41
This statutory pay applies for redundancy and is paid by your employer. If they can't pay because they are insolvent, you might be able to get the money from the Government. If you are not paid or unhappy with your payment you must apply to an employment tribunal. You need to make a claim within six months, otherwise you might lose the right to a payment.
Whilst every effort is made to ensure that the legal information contained on “YouandYourRights” is accurate, it does not constitute legal advice tailored to your individual circumstances. If you act on it, you acknowledge that you do so at your own risk. Neither the Proprietor nor Dean Dunham can assume responsibility and do not accept liability for any damage or loss which may arise as a result of your reliance upon it.