Being made redundant is not something that many of us think about until the situation occurs and due to this if it does we often do not know what our redundancy rights are or how to deal with this, meaning it can be a very stressful time.

What are the Redundancy Rules?

Statutory Redundancy

If you have worked for the same company on a permanent continuous contract for 2 years or more then you should be entitled to redundancy. The amount of redundancy you are entitled to will very much depend on what is stated in your contract of employment, but there is a minimum amount that the government says you are entitled to. Don't assume that your contract will be the same as a colleagues, they may have worked for the company longer than you and been through several company mergers, in which case their contract is very likely to have different terms to yours. The only way to be sure of your entitlement is to look at your own contract, if you cannot find a copy ask the office manager for a copy. If there is no clear indication then look at the guides set by the TUC which give you tips on how to negotiate your redundancy package. Where Redundancy Payments are concerned the first £30k in redundancy is Tax Free.

What Will Your Redundancy Notice Period Be?

The notice period you need to work will also depend on the time you have worked for your employer, it is vital that you are aware of this if you think that redundancy may be on the cards as you can start looking at available jobs and even applying. Be aware though that if you apply for a job and get an interview you must know what you want to do. Look at our job hunting advice for help. Companies have a duty to assist employees to find work if they are being made redundant, be that in helping you with CV writing, or allowing you time off to attend interviews.

Voluntary Redundancy

Companies can offer the option of voluntary redundancy to their workforce. They often choose a specific age group and people who have served a set amount of service to their company. The reason behind this is to lower the damage to staff moral and also to offer the opportunity to leave the company with a good redundancy package which is set by the company to encourage people to volunteer. This type of redundancy is usually expensive to the company as it can be people who have worked for the company for a number of years who choose to take voluntary redundancy as they are set to receive the larger financial packages. It can also mean that the company is left with a gap in skills as the long serving staff are the most experienced, however for the remaining staff this creates opportunity for promotion which results in a positive effect on moral rather than a negative effect as they do not have the fear of being forced into redundancy.

When Redundancy is not Certain

If redundancy is not yet a certainty would the redundancy package be substantial enough for you to stay on just in case or is the job you have an interview for too good to risk turning down? Even though you have not been offered the job, this could affect your state of mind during the interview and result in you not getting the job.

When Redundancy Has Been Confirmed

When Redundancy is a certainty ensure that you make your situation clear and confirm if you will have to stay with your current employer until a certain date to qualify for the redundancy package. If you are the best person for the job then it is a possibility that the new company will agree to hang on for you.

Redundancy is not always a bad thing, it can be used as a fresh new start and even result in you getting a better paid job which you enjoy more. And if your redundancy pay is good then you could also have some savings behind you and be able to do something you have always wanted to but never had enough spare money.

Furthering Your Education

If your redundancy notice period is a long time, then again really think about what you would like to go an do. Maybe what you have always been interested in doing you are fully qualified for? In this case you could enrol at college and take a course to further your knowledge, you may even end up being lucky enough to have completed the course before your redundancy period is up giving you the opportunity to start applying for what you really want to do.

If however, you have not worked for the company longer than 2 years, then start looking and applying for jobs as it is better to have started this process and be cautious then be totally unprepared and end up being out of work and out of money. If you have redundancy confirmed try not to be too fussy on your job hunt, go for something in the meantime that will pay the bills and then keep looking for what you want to do whilst still having some income to get you by. This would not be the recommended advice if you were still in work, but when you know you will soon be out of work it is better to have some money coming in rather than none at all.

What if the Company you Work for Goes into Administration

If the company you work for goes into administration you should be provided with information of who you can contact for any redundancy payments or unpaid wages and this would normally be The Insolvency Service. They will deal with redundancy payments, wages up to 8 weeks, holiday pay up to 6 weeks and notice pay (1 week for every full year you have worked there, up to a maximum of 12 weeks) and will be calculated on your weekly wage up to a maximum of £330 per week. You can also contact HM Revenues and Customs for payments not covered by The Redundancy Payments Office such as Statutory Sick Pay, Maternity Pay, Paternity Pay and Adoption Pay.

Some useful help lines if you are concerned about the security of you job are:-
The Insolvency Service 0845 602 9848, 9am to 5pm, Mon to Fri
The Redundancy Payments Helpline 0845 145 0004, 9am to 5pm, Mon to Fri

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Updated on 16th January, 2009

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