If you are facing redundancy as your furlough has come to an end or that your company can no longer afford to keep you on, this article will help you understand the redundancy process and what your rights are.
Redundancy can be a fearful time in your life. You’ve worked hard at your job, built up friendships there, and now you are left with uncertainty and stress.
It is easy to panic in this situation; wondering how you are going to pay your bills while you find another job.
We support our clients through these stresses. Here is our guide for what to do when you are being made redundant.
Redundancy and furlough
On July 31, 2020, the government passed a law that means your redundancy payout is not affected by your being on furlough. This means your payout should be the same as if you were working your regular hours during the furlough period.
And you’re entitled to receive the statutory notice period for your redundancy. If you are working your notice, on furlough or a flexible furlough, you are to receive your full wage for the notice period.
Your employer can ask you to use your annual leave during this time. Although they must give you twice as many days’ notice as the leave they are asking you to take.
Your notice period is a week for every year the company employs you from two years up to a maximum of 12 years. If you’ve worked for a company for over 12 years, they must give you 12 weeks’ notice.
While your employer needs to make redundancies based on fair grounds and be objective, that you have been on furlough means there is less need for your job within the company and you may be more at risk.
Redundancy and shielding
A recent survey by Citizen’s Advice found that employers who are shielding are twice as likely to face redundancy. However, your employer cannot make redundancies based on:
- sexual orientation
- marital status
- membership or non-membership of a trade union
- working pattern.
According to the Chartered Institute of Personnel and Development (CIPD):
“If staff have been put on furlough because they have caring responsibilities, or are shielding for health reasons, subsequently pooling or selecting these employees for redundancy is likely to constitute indirect discrimination based on sex, disability or age.
“If the principal reason for furloughing staff is that they have child-care responsibilities, a health condition or are more vulnerable to Covid-19 because of their age, it will be important that the employer ensures that they are not placed at greater risk of redundancy because they have been furloughed.”
Indirect discrimination happens when there is a policy, practice or criterion that applies in the same way for everybody but disadvantages a group of people who share the protected characteristics listed above, and you are disadvantaged as part of this group.
If you believe your redundancy is a result of discrimination, do talk to us.
Redundancy and pregnancy/maternity leave
Your employer can make you redundant while on maternity leave, but it must be on fair grounds and not as a result of your pregnancy or your maternity leave.
If you think you are facing redundancy as a result of your pregnancy or maternity leave, then do get in touch.
When redundancy is not genuine
We are in the middle of a pandemic and recession, but this doesn’t mean that every redundancy is as a result of company downsizing. The company has an obligation to follow a fair redundancy process. If you think the decision for your redundancy is not genuine or as a result of personal reasons, then you may want to take legal advice to see if you have a claim.
Redundancy without two years’ service
If your time at the company is less than two years, then your employer does not need to give you any notice about redundancy, they don’t need to meet you to discuss it and you are not entitled to statutory redundancy pay. However, they still need to follow the rules to make sure your redundancy is fair and you would still be entitled to notice pay and accrued holiday.
If you think you may be facing redundancy as the result of discrimination, then do get in touch with us to discuss your situation.
4 things you can do when facing redundancy
1. Start to budget your money.
Your number one concern will be paying the bills, starting with the big ones like mortgage or rent. Take some time to set out your income and outgoings. Know how much you have in your savings and what the minimum amount is you need each month.
Getting this ready before you are offered redundancy will help ease some of the financial pressures.
Take your insurance policies out of the drawer and start checking the small print. If you have payment protection insurance or insurance on your mortgage, then you need to understand what this covers.
2. Understand your entitlements
There are three types of payout that you may be entitled to if you have over two years service:
- Notice of termination – this is a week’s notice if you have been employed for two years or less. For every additional year you’ve worked, you get an extra week of notice.
- Holiday pay – if you’ve not taken all of your holidays yet then you are entitled to be paid for any days you’ve not used.
- Redundancy payout – essentially this is compensation for your loss of work. It’s calculated based on your age, how long you have worked at the company and your average weekly pay (a statutory cap of £525 applies).
21 years and under – half a week’s pay for each continuous year at the company
22-40 – a week’s pay for each continuous year of employment
41 years and over – you get a week and a half’s pay.
Don’t forget to work the payout according to the age you were at the time. And that your employer caps at a week’s pay at £525.
For example, if you worked at the company for ten years and you started when you were 35, then the first six years of pay are calculated at a week and the last four at a week and a half.
3. Check your contract
Some companies offer more than basic statutory entitlement. Pull out your employment contract and check the details.
If you are on a zero-hours contract or a fixed-term contract, then you are still entitled to redundancy pay, if you have worked for the same company for over two years. Payout is calculated based on length of service, age and weekly wage.
4. Talk to someone
Going through redundancy at any time of life is difficult. It can affect your home life as much as it does your work. Make sure you have someone to talk who can understand what you are going through.
Get some advice
It is important to take legal advice when your company announces redundancies, or you are aware you might be made redundant. All that tricky small print and legal language can be confusing. Taking advice means you have the certainty of what you are being offered is the best possible outcome in your settlement agreement.
It reduces the pressures on you at an incredibly stressful time of your life.
You can also make sure that your employer is going through the correct redundancy process.
If you are still employed but feel you could be included in staff cuts for whatever reason, then you may want to consider an exit strategy. Our exit strategy packages start while you are still employed and make the process easy and straight forward.
Even if you are going through a redundancy consultation process we can help you to try and obtain an enhanced package.
We realise that there is a lot to think about when you are facing redundancy which is why it is important to get the right advice as soon as possible. Get in touch to find out how we can help.