What rights do you have when facing redundancy?

Redundancy is a type of dismissal, which usually happens when the employee’s role is no longer needed within the organisation. For those facing redundancy, it can be an extremely stressful time as you try to navigate through the redundancy period and figure out your next steps.

But, what rights do you have as an employee when you face redundancy?

In this article, we’ll discuss what happens when an employer makes you redundant, your rights and what you’re entitled to.

Why does redundancy happen?

Employers must have good reason as to why they are making you redundant. Redundancy can only lawfully happen if the business – or part of it – has: 

• Closed or is due to close
• Changed the number or types of roles needed to perform the work
• Changed or is due to change location

If you have been dismissed for a different reason than the ones above, then it is not redundancy. Take a look at our recent blog about other types of dismissal.

Notice periods

Your employer must give you a notice period before the employment ends – these are different lengths depending on how long you have been employed at that organisation: 

• Between one month and two years – at least one week’s notice
• Between two years and 12 years – one week’s notice for each year of service 
• 12 years and over – 12 weeks’ notice

You are entitled to notice pay, which will either be full pay for the notice period or in lieu of the notice. 

This is worked out and based on your average weekly pay over the last three months before your notice period started.

The selection process

When an organisation goes through a round of redundancy, it often doesn’t involve all employees, so the employer must follow a process and fairly select the employees they are going to make redundant.

Some of the reasons you may be selected for redundancy are: 

• Your length of service – some employers select the employees with the shortest length of service
• You have volunteered to take redundancy – also known as self-selection 
• Your disciplinary records
• Your skills, qualifications and experience – compared to others within the organisation

However, if the organisation is closing down and making all its employees redundant, or if you are the only employee, the employer does not have to follow a selection process.

Employers cannot legally make you redundant based on things like your sex, marital status, race, disability, age, religion or sexual orientation, for example. This would be unfair dismissal, not redundancy. 

If you feel that your employer has selected you unfairly, you can appeal – write to your employer outlining the reasons. 

When it comes to unfair dismissal or discrimination, you can make a claim to an employment tribunal. We’d always recommend trying to resolve the issues directly with your employer – either by appealing the decision or through a grievance – before taking the claim to an employment tribunal.

What are you entitled to? 

You are entitled to statutory redundancy pay if you have worked for your current employer for over two years. 

Statutory redundancy pay is: 

• Half a week’s pay for each full year of service that you were under 22 years old
• One week’s pay for each full year of service that you were between 22 and 41 years old
• One and a half week’s pay for each full year of service that you were over 41 years old

This amount is capped at 20 years of service. 

It’s worth noting that you are not entitled to redundancy pay if your employer 1) offers to keep you in employment or 2) offers you suitable alternative work which you decline without good reason.

What happens if the employer is insolvent?

Insolvency is when the organisation is unable to pay debts owed; when a business collapses. 

If this happens to the organisation whilst you’re an employee, you have certain rights. 

First, the person dealing with the insolvency must disclose how your role is affected and what the next steps are. 

They should give you: 

• A RPC fact sheet
• Your CN number – this will be used when you apply for the money you are owed

After this – as long as you were not transferred to a new employer before your former employer became insolvent – you can apply to the government for your redundancy payment, holiday pay, any unpaid wages, overtime or commission, or any money you would have earned in your notice period.

Whether you feel like you have been unfairly dismissed or just want to check that everything is in order with your redundancy, speak to our specialist employment law team. 

Contact our employment law solicitors on 01484 442 700 (Holmfirth office), 0161 427 0084 (Marple Bridge office) or email info@bridgelawsolicitors.co.uk.

Written by Nikki Sharpe