Since the start of the COVID-19 pandemic, redundancy rates in the UK have skyrocketed, with the Office for National Statistics documenting a record high towards the end of 2020. In the current climate, it is more crucial than ever to understand your redundancy rights and make sure that you are being treated fairly. In this article, we explain what you are entitled to from your employer.
Can I be made redundant without warning?
If you have worked for your employer for a month or longer, you are legally entitled to a notice period:
- If you have been employed for between a month and two years, you must receive a week’s notice.
- For two years’ service or longer, you must get a week’s notice for each full year you have worked, up to a twelve-week maximum.
Notice periods are different if you are part of a ‘collective redundancy’, where 20 or more people are being made redundant. Your employer will have to hold a group consultation, which must begin at least 30 days before any individual’s employment ends. If 100 or more employees are being made redundant, this consultation period increases to 45 days.
Your employer should warn you at an early stage of the process that you are at risk of redundancy and must consult with you before finalising their decision. However, the legal notice period does not begin until your employer formally tells you that you are being made redundant and confirms your finishing date.
Make sure to check your employment contract, as it may entitle you to a longer notice period than the statutory minimum outlined above.
What steps must my employer take if they are making me redundant?
Your employer must follow a fair procedure when making you redundant. What is considered fair will depend on the company’s size and resources. If your employer does not treat you fairly, you could make a claim for unfair dismissal.
Steps that your employer might be expected to take include:
- considering whether they can avoid making redundancies
- using fair and objective criteria to make redundances, such as attendance, performance and disciplinary record
- warning you early on in the process that you are at risk of redundancy
If you think your employer has not treated you fairly, you should seek urgent legal advice.
Am I entitled to redundancy pay?
If you have been working for your employer for two or more years, you will usually be entitled to statutory redundancy pay. You will receive:
- half a week’s pay for each full year of employment during which you were under 22
- one week’s pay for each full year of employment during which you were aged between 22 and 41
- one and a half week’s pay for each full year of employment during which you were 41 or older
What is the maximum amount of statutory redundancy pay I can receive?
Your total length of service is capped at twenty years. Weekly pay is calculated as the average you earned each week for the twelve weeks prior to the day you received your redundancy notice and is capped at £538. The maximum total amount of statutory redundancy pay you can receive is £16,140.
Are there any exceptions?
You will not be eligible for statutory redundancy pay if your employer offers you suitable alternative employment and you unreasonably turn it down. Certain roles are also ineligible, for example, civil servants.
Contractual redundancy pay
You should check your contract to see if it entitles you to contractual redundancy pay. If this is the case, the amount paid cannot be less than what you would be owed in statutory redundancy pay. You should seek advice from a solicitor if you are unsure.
What are the tax implications?
Redundancy payments of less than £30,000 are not taxable. If you receive a redundancy payment of more than £30,000, you will owe some tax. Your employer should calculate and deduct the tax owed.
If your employer also owes you wages or holiday pay, they will deduct tax and National Insurance contributions before you receive it.
Can I be made redundant while furloughed?
Your employer can make you redundant while you are furloughed under the Coronavirus Job Retention Scheme; however, they must still follow a fair procedure. If you are eligible for statutory redundancy pay, this must be calculated based on what you would have earned normally, not the lower pay rate you may have received whilst on furlough.
Am I allowed time off to look for another job?
If you have worked for your employer continuously for two years by the end date of your redundancy notice period, then you are allowed a reasonable amount of time off to search for another job or to organise training that will help you towards new employment. How long you can take off will depend on your situation, such as how hard it will be for you to find work.
However much time you take off, your employer only has to pay you 40% of one week’s pay. For instance, if you normally work five days a week and you take four days off, your employer only has to pay you for the first two days. You should check your contract, though, as it could entitle you to a more generous arrangement.
Contact our Employment Lawyers in Glasgow & Paisley today
If you are facing redundancy or are concerned about your rights, time is of the essence. Act now to ensure that you get what you are entitled to. Contact our Employment team on 0141 887 5181 for our Paisley branch or 0141 551 8185 for our Glasgow branch, or complete our online enquiry form.