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Redundancy - your rights

Redundancy: your rights explained

If you’re facing redundancy, you have certain legal rights and your employer must follow the rules when making you redundant.

In these uncertain times, many workers are concerned about job security. It’s important to note that during the current pandemic your rights have not changed. 

This article explains your redundancy rights, but if you have any further questions we will be  happy to help. Please contact the PM Law team on 0114 220 1795 or email disresenquiry@pm-law.co.uk. We aim to provide you with all the support and advice you need in order to ensure your rights are met during this worrying time. 

Eligibility for redundancy rights

You must meet certain criteria to be eligible for redundancy rights. 

You need to be an employee and have 2 years continuous service with your employer before the date you are made redundant.

If you don’t qualify for redundancy rights

If you have worked for your employer for less than 2 years, you won’t qualify for statutory redundancy pay. However, your employer must still follow a fair selection process.

The redundancy process

Your employer can make you redundant for one of 3 reasons:

  • A complete business closure – this can also be a temporary closure.
  • A workplace closure – this can be a particular location.
  • A reduced requirement for employees – such as restructuring, change in equipment, less work available etc.

The selection process must be fair and must use an objective criteria that can be checked. You have a right to see the process which has been used, and why you have been selected. Your employer has a legal duty to ensure they do not use a criteria which discriminates directly or indirectly.

Your employer must give you warning and consult with you. They must also meet with you in person (in the current climate, this could be by phone or video call). This gives you the opportunity to raise any concerns you have, or to make suggestions to avoid your redundancy. There are different rules for consultation with employees when more than 20 people are being made redundant. 

Your employer must ensure they have taken steps to minimise any redundancies. They should offer you alternative suitable employment if this is possible, or voluntary early retirement if applicable. They must also ensure you receive your redundancy pay.

How statutory redundancy pay is calculated

If you are an employee and have worked continuously for your employer for more than two years, you have a right to receive redundancy pay.

This payment is calculated by reference to your gross pay, how long you have worked for your employer and your age:

  • 22 years and under – you are entitled to half a week’s pay for each full year you have worked for your employer.
  • 22 years to 41 years – you are entitled to 1 weeks’ pay for each full year you have worked over the age of 22. Each year before 22 is still paid at half a week’s pay per year.
  • 41 years and above – you are entitled to 1 and a half weeks pay for each full year worked over the age of 41. Each full year worked below that age is calculated as the above.

There are limitations to redundancy pay:

  • Amount of eligible years worked is capped at 20 years.
  • The weekly pay used to calculate redundancy pay is capped at £538 per week.
  • The total entitlement payable for redundancy pay is capped at a maximum of £16,140.

You are entitled to a written explanation as to how your employer has reached their calculation of your redundancy pay.

If you are offered an alternative job which is classed as suitable, and you chose to turn this down, you may lose your right to receive redundancy pay.

There is a redundancy pay calculator on the Government website here

Redundancy notice 

If you are being made redundant, by law you also have a right to redundancy notice. This means your employer must give you at least a minimum amount of notice as below:

  • If you have worked for your employer for over 1 month but less than 2 years, you are entitled to a minimum of 1 weeks’ notice.
  • If you have worked for your employer for 2-12 years, you are entitled to a minimum notice of 1 week for each year worked.
  • If you have worked for your employer for more than 12 years your minimum notice entitlement is 12 weeks.

You should receive full pay during your notice period, separate to your redundancy payment.

If your employer states that they do not wish you to work your notice period, they can opt to give you a payment in lieu of notice. You would only be obliged to accept this if it is contained within your contract of employment. This arrangement can still be offered, if it is to be by mutual consent of both parties.

Payment in lieu of notice is your full pay along with any additions you would usually have, such as pension contributions.

Unfair redundancy

You have a right to appeal your redundancy if you feel that it has been unfair in any way. If your employer has selected you for redundancy on grounds of, for example, age, sex, race, disability or regious belief, this is classed as discrimination and could result in you being able to claim unfair dismissal. We can help if you believe one of these or another category applies to you. More information on unfair dismissal here

Redundancy during furlough

If you were on furlough when you were made redundant, these rights still apply. For more details and what to do if your employer is insolvent, see the Government website here.

If you feel that your employer has not followed the rules or that you have not been treated fairly, we can help. Contact the PM Law employment team on 0114 220 1795 or email disresenquiry@pm-law.co.uk

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