Sadly, redundancies are a fact of life in the modern workplace. This factsheet aims to give you the 10 best tips on how to survive redundancy – either by convincing your employer to keep you on or, if your job is to be made redundant, to help get you the best severance terms.
Top 10 Tips for Surviving Redundancy
- Change their mind about redundancy -If redundancies are on the cards, your employer must warn and consult you beforehand. Typically, this means they need to speak to you individually, explain what is happening and outline the reasons for redundancy, such as a fall in sales, and discuss it with you ‘meaningfully’. Use this chance to explain how savings can be made elsewhere without job cuts, point out to them how important you are and how your job is crucial to them. They are under a duty to consider this and respond to you. This is an opportunity to get them to change their mind.
- Get Union help for you redundancy – If you are a Union member, get your Union’s help and representation at
meetings. A skilled Union representative can give you an ‘edge’ and will support you in arguing for your job to be saved.
- Ask to see redundancy selection criteria – Your employer cannot lawfully just choose who should stay and who should go without careful thought and the application of a fair process. Employers should look at “pooling” employees doing the same type of work. They should set objective non-discriminatory selection criteria (such as disciplinary record, performance, time-keeping and so on) and the criteria should be fairly assessed by managers. Ask to see the criteria your employer intends to use and raise any criticisms you may have; once you have been assessed ask for your scores, check they are fair and, if not, challenge them.
- Check contractual redundancy policy – Always check whether your employer has a contractual redundancy policy and if so, insist they follow it. Such a policy may entitle you to enhanced redundancy payments or require your employer to follow a detailed redundancy process.
- Check internal vacancies to avoid redundancy – If the worst happens and you are selected for redundancy, but you wish to stay, ask to see all current internal vacancies and any future vacancies that are expected. Your employer should check to see if there are any vacancies and make it possible for you to apply for them. If there are any vacancies, ask for copies of the job descriptions and written details about pay and work location. Only by doing this way will you be able to decide
whether you want to apply for the vacancy.
- Appeal your redundancy – Appeal against the selection and dismissal – you have a right to attend an appeal hearing, normally before a different and more senior manager independent of the process, who should reconsider matters for you. This is a chance to persuade your employer to change its decision to dismiss you.
- If offered a new internal job understand the job description – Remember that if your employer offers an alternative job to you, you can lose your right to statutory redundancy pay if an Employment Tribunal thinks that the alternative job was suitable and that you unreasonably refused it. Therefore, you need to have as much information as possible about what the new job involves and assess its suitability very carefully. Suitable alternative employment should be of a similar nature to your current role and require the same skills. You should compare the status, place of work, tasks to be performed, pay, hours and responsibility of the new job, to your original role.
- Negotiate severance package for your redundancy – If redundancy is inevitable, attempt to negotiate a ‘severance’ package. Your employer may only intend to pay the minimum statutory redundancy pay and notice. Argue for them to improve this or, if they require you to work out your notice, try to get them to pay you your notice pay in lieu or to place you on garden leave, giving you more time to look for alternative work.
- Check your contract of employment for what it says about redundancy – Always check your Contract of Employment as it may contain limits on what you can do post-termination, such as preventing you from competing with your employer for a period. If so, ask your employer to drop these restrictions and if they agree, ask them to confirm it in writing.
- Guarantee Payments if you are made redundant – If your employer is insolvent or becomes insolvent during the redundancy process, remember that some payments are guaranteed by the Government, such as statutory redundancy pay, notice pay, holiday pay and so forth (subject to a cap).
What are the reasons for redundancy?
- Financial cuts
- Business is moving
- New process/system
- Business closure
1. Financial cuts
If an employer is experiencing times of difficulty that is impacting their finances. For example, during the coronavirus pandemic, the UK saw ‘the number of workers on UK payrolls dive more than 600,000 by May compared to before lockdown’. It is rarely an employee’s fault for being made redundant due to financial cuts and they should not worry about their ability.
2. Business is moving
If the whole business is moving its premises to another location away from the employee, then redundancy is likely the most common option.
3. New process/system
If the employer adds a new process or system to how things are being done, this can impact the redundancy of an employee as they might not be needed to fulfil their original job.
4. Business closing
This is typically the most common form of redundancy. As the business is closing, there is no need for an employee, resulting in redundancy.
Will I lose my redundancy pay if I get a new job?
If you plan on starting a new job before the consultation period has ended, you will likely lose your redundancy pay. If you would only receive a small redundancy package and you have a job lined up, it could be beneficial to waive your redundancy package and accept the job.
How is redundancy calculated?
You will not get a statutory redundancy pay if you have served less than 2 years with the employer, so this analysis is on the basis that you have served over 2 years.
- <22 years old = Half a week’s pay for each year served
- 22-40 years old = 1-week pay for each year served
- 41 years old = 1 & ½ weeks’ pay for each year served
You cannot claim more than 20 years’ worth of redundancy pay. To get a full break-down, visit the government website to calculate redundancy.
Redundancy notice period
If you are being made redundant, you must be given a notice. The length of the notice varies depending on how many years’ service you have with the employer.
Below explains the length of notice required by the employer to give to the employee:
- <2 years employment = >1-weeks’ notice
- 2-12 years employment = 1-weeks’ notice for each year served
- >12 years employment = 12 weeks’ notice
You should always check your contract of employment as you may contractually be entitled to a longer notice period than indicated above.
Can I be illegally made redundant?
Employees have been made redundant illegally by employers and have taken them to court. There are two types of illegal redundancy: unfair dismissal and wrongful dismissal.
What is unfair dismissal?
Unfair dismissal is a statutory right available to employees who believe they have been dismissed unfairly or unreasonably by their employer.
Employees must have completed two years’ service before they are can bring an unfair dismissal claim.
There are, however, some dismissals which are deemed to be “automatically unfair”. These cases have no qualifying service period.
What is wrongful dismissal?
Wrongful dismissal claims are where an employer has breached the contract of employment. A typical breach is when an employee has been released and has not received notice from their employer within the minimum notice period.
We have created a page to help people understand what unfair dismissal and
wrongful dismissal are. Feel free to read it over to get more information.
What are the most common questions about redundancy?
What are the maximum years for redundancy?
You cannot claim more than 20 years’ worth of redundancy pay.
Do I get my holiday pay if I am made redundant?
You can receive holiday pay from when you were supposed to go on holiday.
However, if you book over the total amount that you are entitled to, the employer can remove the equivalent payments from the total redundancy pay.
What happens to your pension when you are made redundant?
If you have been made redundant, then you will no longer be paying money into your pension. There are a few options that you could explore below:
- If you are old enough, you can take an early retirement.
- You could transfer all your pension payments to your pension plan
- Leave the pension in the scheme and if you retire you will receive the pension left in that scheme
- Move your pension into a new scheme with a new employer
Redundancy is never an easy or pleasant process. Please try to remember that it is normally the job that is redundant not the person and when it comes to finding new employment most prospective employers understand that redundancy, as a reason for dismissal, is not unusual and do not see it as a negative.