Redundancy and Redundancy Pay.

Redundancy is a term/process used when an employer needs to reduce the number of employees.

You may have rights when you are being made redundant which cover-

-Arrangements to find new employment
-Discussions covering your redundancy
-Relocation within the organisation
-Any payments
-Term of notice

Redundancy often comes with a selection process, this must be undertaken in a fair manner, the employer cannot discriminate because of your sex, age etc if you feel the process has been unfair, you should seek legal advice immediately.

The selection process can be defined by criteria such as-

-Voluntary redundancy
-By your performance in the job- records covering discipline
-By order of terms of employment within the company, however this must not discriminate.

If your job has been removed then your employer does not need to follow a process, there are many criteria that your employer can not use when selecting people for redundancy, if you feel in any way, the process is unfair, then once again take advice.

It is always worth writing to your employer asking for the reasons why you have been selected; this will help understanding and could help with any action you may wish to take if the process has been unfair.

The most common criteria for redundancy selection, is via voluntary redundancies, it's the employers decision if they choose you for redundancy, not all volunteers will automatically be given redundancy.

Voluntary redundancy can soften the blow to staff moral as those leaving are doing so because they want to, however this process does not always work for the employer, and the employer will be well advised considering the outcome first for any criteria they select.

Redundancy Payments.

If you have been employed for over two years with your employer, you are entitled to a redundancy payment from your employer.

The payment you will receive is calculated-

50% of a week's wage (before tax), for each year employed, before the age of 22.

Full weeks wage for any period employed between 22 and 41.
150% of a week's wage, over 41.

Calculators are available on-line to help you work out your payment, if your payment is under £30,000 you will not be liable for tax, any payment over this threshold will be.

Important Caveats are -

If you have been offered to stay or have been offered another role within the organisation and decide not to take it, without fair justification, you may not be entitled to a redundancy payment.

There are Employment classes that are not eligible for redundancy payment for example Armed forces, police, seamen, some apprentices, amongst others. If you have been informed that you are not eligible for a payment and feel this is incorrect, check with a legal adviser.

Period of Notice.

Your employer must give you a notice period if they are planning to make you redundant; these differ depending on the length of time you have been employed.

They are-

Employed between 1 month - 2 years at least one weeks notice.

2 years and 12 years - one week notice for each year employed.

12 years plus - 12 weeks.

Your employment contract may detail the notice period on redundancy, which may differ from these.

You are entitled to speak to your employer about why you have been selected for redundancy and they must explore possible alternatives, this is termed as 'consultation', you are able to take legal action against your employer if they fail to comply with this process.

Earlier on we mentioned that you were exempt from redundancy pay if you have been offered suitable employment, the criteria for a job to be suitable depends on the similarities between this and your existing position, your skill set, the terms of employment, and factors such as pay, where the new job is and your working hours.

Your view of whether the alternative position is suitable, and your employers view may differ, we recommend you contact a legal adviser for guidance.

What happens when you are looking for a new job?

You are allowed to look for a new job whilst employed, this must be deemed as reasonable, be aware that your employer can reduce your wages by up to 60%.

We would recommend that you consult with an employment law solicitor if you are looking to make redundancies or if you are an employee taking redundancy.