What to do if you're made redundant
Worried about being made redundant? Here's what to do.
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Know your rights
Take a peek at your contract of employment, which sets out your rights to redundancy pay and notice.
You are entitled to the statutory legal minimum redundancy pay, providing you have worked for your employer continuously for at least two years.
You are due half a week's pay for every continuous year of service under age 22, a full week's pay for every full year between ages 22 and 41, and 1.5 times your weekly pay for every full year after age 41.
But this is only up to a ceiling of £479 a week.
Calculate your entitlement at Gov.uk. And remember, the first £30,000 of redundancy pay is tax free.
With any luck, your employer will be more generous. If they try to undercut these minimum limits - complain! Go to your employer first, then your union, if you have one, or any internal grievance system.
If that still doesn't help, the Advisory, Conciliation and Arbitration Service (Acas) can give you free and impartial advice.
Join together
If your company is axing more than 20 posts within 90 days, it is legally obliged to consult any recognised union, which can negotiate a redundancy package on your behalf.
If there is no union, the affected employees can appoint their own representatives.
If less than 20 posts are being made redundant, your boss must consult directly with you and anybody else losing their job.
Don't forget to include reimbursement for any unused holiday, outstanding expenses and employee benefits in any negotiations.
Your employer should try to find another post in the company that reflects your skills and education, which you aren't obliged to accept. It isn't obliged to help you find work elsewhere.
If your employer wishes to keep you on or offers you a suitable alternative role and you refuse it without good reason, you won't be entitled to redundancy pay.
Don't be fooled
Being made redundant isn't the same as being sacked, and employers shouldn't exploit it to get rid of somebody.
If your company skims the correct procedures, or is hiding the real reason for getting rid of you, you could claim unfair dismissal. So if you announce you are pregnant and next day your post is suddenly made redundant, you might be a bit suspicious.
If complaining to your employer doesn't work, you may need to go to an employment tribunal.
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Help! I'm self-employed!
Then bad news, I'm afraid. Statutory redundancy rights only apply to employees. Casual staff, agency workers and freelancers have little protection.
Sign on
If you are made redundant, you will be able to claim contributions-based Jobseeker's Allowance of up to £73.10 a week (£57.90 if under 25). And you only get that if you are actively seeking work.
Contributions-based Jobseeker's Allowance isn't means-tested, so any redundancy payout won't affect your entitlement. But you won't get a penny until the period covered by any pay you received in lieu of notice has expired.
The self-employed typically don't pay Class 1 National Insurance Contributions (NICs), so do not qualify.
This payout only lasts six months, after which you can claim income-based Jobseeker's Allowance, for those who haven't made enough NI contributions.
The table below breaks down how much you may expect to receive:
| Status | Weekly amount |
|---|---|
| Single (under 25) | Up to £57.90 |
| Single (25 or over) | Up to £73.10 |
| Couples (both aged 18 or over) | Up to £114.85 |
These benefits are complicated, but you can check your entitlement online at Gov.uk.
You may also be able to claim housing benefit and council tax benefit, and if your income has fallen you should apply to get any child tax credits recalculated.
Save your home
If you’re a homeowner getting certain income-related benefits, you might be able to get help towards interest payments on your mortgage.
This help is paid as part of your benefit and is called Support for Mortgage Interest (SMI).
If you qualify, you’ll get help paying the interest on up to £200,000 of your loan or mortgage. If you’re getting Pension Credit, this figure is £100,000.
Got PPI? Claim on it
If you are the proud owner of payment protection insurance (PPI), now is the time to check the policy is up to scratch by making a claim. Policies are notoriously difficult to claim on, so good luck!
Read How to claim your PPI compensation and How to get paid when you're forced out of work for some tips.
Even if you are succesful a typical payout lasts just 12 months, but hopefully this will give you enough time to find another job.
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Sort out your finances
With any luck, you'll be back in gainful employment before too much damage has been done to your finances, but until then, you should start budgeting. This online calculator may help, as could our guide to budgeting in five simple steps.
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Comments
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I am 53 now, and was made redundant just weeks before Christmas from Riverisland's Head Office. I had worked there for 26 years, and was made redundant along with ten other colleagues, many of whom had also worked considerable length of time for RI. I was paid a paltry sum of under £11k, for my 26 years service, and this even though the company was in profits for the year. I have tried negotiating a better deal from them, but did not succeed. The only 'relief' was that they saw it fit to pay us our 'notice period' without having to work it through!!! I have written to several papers, politicians and even spoke to a union, but no support was had in any direction. I am now faced with the indignity of queuing up at the job centre for £71 per week. I have been looking for jobs, but nothing suitable has been found, and it seems employers only want youngsters nowaday..... What has this country come to...
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In my eyes my employer exploited the system to make staff redundant. They decided to put the company into Administration on a Friday by the Monday they had set up a new company re-employing the staff they "wanted". This way they got out of paying the full redundancy based on our salaries and left the government (other tax payers) to pick up the tab!!
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hi ive just been made redunded after 3 1/2 years service plus 3 others from the night shift which i work on we had a new person join about over a year ago and he has been trained on all jobs without the other night shift given the chance and now as im being layed of he will be taking my job as i dont think this is fair by any means as the night shift boss was promoted to work at our other site which our company brought out late last year so we are paying for there mistake plus the cost of bringing the other site up to scratch,is there anything i can do about this as my role is being used by someone else and is still active as they are not making mix but only cubes and the dayshift have not been effected as much as the night shift any advice would be great as ive been given 3 weeks notice from today
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13 March 2013