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Dealing with Redundancy - Part 1 - Knowing Your Rights

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Redundancy is an unfortunate fact of life particularly in an economic downturn but with the right advice it doesn’t have to be the end of the world. There are a number of issues to consider if you are facing redundancy and in this series we will look at how to deal with each issue in detail, beginning with Knowing Your Rights.

Step 1. Knowing your rights

Losing your job can have both legal and financial repercussions, so it's important to know precisely what you are entitled to and what your rights are. Being made redundant is often a difficult and emotional time but, should the worst happen, being forearmed with this knowledge can vital in ensuring a smoother process. AllReadingJobs is pleased to bring you all the advice you should need to make dealing with this difficult situation a bit easier.

Reasons For Redundancy

There are a number of reasons why your employer is allowed to make redundancies but the most common reasons include your company closing down, the work you do is no longer needed, your company is moving location or it decides it requires fewer staff. Firstly, it is important that you know the full reason you are being made redundant as it may affect your rights. Your employer should request a meeting with you and offer you a full reason at this time.

Notice Period

During this initial meeting your employer should also make you aware of the notice period you are being given. As soon as you are made aware that you are facing redundancy you should dig out your contract of employment in which you should find your notice period is specified. Your employer is obliged to give you your full contractual notice period.

Statutory Redundancy Pay – Do You Qualify?

Your redundancy package will be based on how long you've worked for your employer and the reason why you've been dismissed. Your employer is obliged, if you qualify, to provide you with a basic redundancy called Statutory Redundancy Pay. To qualify you must:

  • Be an employee (self-employed people and casual workers don't qualify)
  • Be under 65 (unless the normal retirement age for your job is under 65)
  • Have worked for the employer for two years continuously since the age of 18.

Statutory Redundancy Pay – How Much?

How much statutory redundancy pay you'll receive depends on your age, your weekly pay and how long you've worked for the company. Follow the right calculation below to work out how much you will receive:

Aged 18-21 - half a week's pay x years of service
Aged 22-40 - one week's pay x years of service
Aged 40 to 65 - one-and-a-half week's pay x years of service.

For example, Sophie aged 35 has been with her company for 5 years and is currently earning £24,000. She will receive, as a minimum, approximately £2,500.

Alternative Job

It is important to be aware that your employer may offer you an alternative job. This could be in a different branch or department for example and should have a comparable salary and hours and should be in a reasonable travelling distance. If you reject a suitable alternative job it may affect your Statutory Redundancy Pay. You have the right to a trial period in any alternative job and are still permitted to take redundancy if you or your employer decides it is not working out.

Negotiating a deal 

Your company might offer a better redundancy package than the statutory minimum. If they don’t and you have no pre-arranged agreement, you might want to consider negotiating a deal. If you feel uncomfortable doing this you could ask a representative to do this on your behalf.  You might also even be able to get extras thrown in to your package such as your computer, company car or mobile phone. You might also be able to persuade them to pay for private careers advice for you.

During this negotiation it is important to have any offer written down and take some time to think about it rather than agreeing verbally immediately.

Getting Help

It can be difficult to know who to turn to for help during the redundancy process but there are a number of people who can offer you assistance. If applicable you should speak to your trade union professional bodies or for free advice your local Citizens' Advice Bureau will help. You may also want to consider speaking to an independent financial advisor or engaging an employment law expert. Engaging a law expert need not be costly as you may qualify legal aid or you may be able to get legal expenses insurance is as an "add-on'' to your home policy. Most insurers will sell this cover for around £20 a year.

Before You Leave

Once you have sorted out the finer points of your redundancy it is vital you receive the following:

  • Your P45
  • Written details of your redundancy package
  • A good reference
  • A note of the contact details of your line manager, trade union representative, human resources department and pension fund trustees

Useful Telephone Numbers

The Department of Trade & Industry (redundancy payments office) – 0500 848 489
The TUC ‘Know Your Rights’ helpline - 0870 600 4882

Next time in Step 2 we will look in detail at the financial ramifications of being made redundant including tax, pensions and advice on what to do with the money.


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Additional resources related to this article

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Additional resources related to this article


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Legal Disclaimer: Please note that this information is not intended to be exhaustive or be a substitute for legal advice. The application of the law in this area will often depend upon the specific facts and you are advised to seek specific advice on any given scenario.