What are your employee rights during redundancy?
Redundancy is a form of dismissal from employment and generally happens when an employer needs to reduce the size of the workforce in order to save costs.
If you are being made redundant, then provided you have been employed continuously for 2 years under ‘employee’ status, then there are a number of rights you are entitled to. This article explains your key rights during redundancy.
Being fairly selected for redundancy
An employer should use a fair and objective method of selecting employees for redundancy. Reasons based on certain characteristics such as age, sex, disability or race will not be fair reasons and can give rise to a claim for unfair dismissal. Selection due to maternity leave, jury service, whistleblowing or exercising your statutory rights are some of the other reasons which will be deemed unfair.
Redundancy Pay
Employees who have been working for their employer for 2 years or more are entitled to statutory redundancy pay. This is calculated in accordance with your age, salary and length of service. For redundancies made after 6th April 2020, the statutory award is capped at £538 per week, regardless of your salary. The length of service is capped at a maximum of 20 years and the maximum statutory redundancy pay is £16,410.
Notice Period
Even if you are being made redundant, you are still entitled to be given notice. Notice periods will be given in accordance with statute or the contract of employment, whichever is greater. Statutory notice periods are as follows: –
- at least one week’s notice if employed between one month and 2 years;
- one week’s notice for each year if employed between 2 and 12 years; or
- 12 weeks’ notice if employed for 12 years or more.
If the contract of employment provides for a longer notice period, then the employer must give notice in accordance with the contract; they cannot, however, give less than the statutory requirement.
Notice Pay
In addition to your statutory redundancy pay, your employer should either: –
- Pay you throughout your notice period; or
- Pay you in lieu of notice.
If your contract of employment includes a clause which allows payment in lieu of notice, then an employer can end your employment without notice, provided pay is provided in exchange of the notice.
The right to be consulted
If you are being made redundant then you have a right to be consulted by your employer. If the number of redundancies is between 1 and 19 then there is no set consultation procedure. However, if there are 20 or more redundancies, then the collective redundancy rules must be followed. This requires the appointment of a representative and a minimum period of consultation. The minimum consultation periods are as follows: –
- 20 to 99 redundancies: the consultation must start at least 30 days before any dismissals take effect; or
- 100 or more redundancies: the consultation must start at least 45 days before any dismissals take effect.
The offer of suitable alternative employment
If there is other suitable alternative employment available, then you employer must offer this to you. If they do not, then this may give rise to a claim for unfair dismissal. Whether a job is considered suitable depends on a number of factors such as;
- how similar the work is to your current job;
- the terms of the job being offered;
- your skills, abilities and circumstances in relation to the job; and
- the pay (including benefits), status, hours and location.
Employees should carefully consider alternative job offers, as they may lose the right to statutory redundancy pay if they unreasonably turn down a suitable offer.
The right to time off to find new employment
If you are being made redundant then your employer should allow you a reasonable amount of time off in order to find alternative work. During such periods of leave, your employer is only required to pay you up to 40% of your weekly wages.
