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11 things you need to know if you’re at risk of redundancy

Worried you’ll lose your job during the coronavirus crisis? Here are your rights and where to find help

11 things you need to know if you’re at risk of redundancy

The UK’s unemployment rate rose to 5% in the three months to November, up from 4.8% in the previous three months, according to the latest data from the Office for National Statistics (ONS).

Redundancies rose to a record high of 395,000 in the same period – it’s estimated that redundancies peaked in September 2020, but are expected to remain high.

According to the Bank of England Agents’ summary of business conditions gathered between mid-November and early December, businesses’ employment intentions had improved slightly but further job cuts are expected in retail, hospitality and leisure once the government’s Coronavirus Job Retention Scheme comes to an end.

This has been seen recently with the Arcadia retail group going into administration, putting thousands of jobs at risk.

  • Which? Legal can offer its members personal advice on redundancy. Visit Which? Legal to find out more.

1. Jobseekers will be offered coaching and advice 

Jobseekers will be offered coaching and advice into ‘growing sectors’ as part of a £238m employment programme from the Department for Work and Pensions (DWP).

The government-backed Job Entry Targeted Support (JETS) scheme aims to help people who are out of work because of coronavirus. 

The DWP says it’s recruiting an additional 13,500 ‘work coaches’ to help deliver the scheme.

The JETS scheme will see the DWP ramp up support for benefit claimants to ensure those put forward for the scheme have access to tailored, flexible support to quickly get back into employment.

It includes specialist advice on how people can move into growing sectors, as well as CV and interview coaching.

The programme aims to give job hunters the boost they need to return to employment through an action plan agreed with their personal work coach, peer support and opportunities to build their skills.

A full list of the counties offering the service and when the service will be live is available here.

The scheme will provide employment support to Universal Credit, All Work related Requirements and New Style Jobseekers Allowance claimants who have been unemployed for at least 13 weeks.

For more information, you can contact Jobcentre Plus on 0800 169 0310.

2. The furlough scheme has been extended

The Chancellor has extended the Coronavirus Job Retention Scheme – which pays up to 80% of workers’ salaries who have been placed on furlough due to coronavirus – until the end of April 2021.

An estimated 3.8 million workers are getting paid under the scheme currently (as of 31 December 2020), and around 9.9 million people have benefited at one time or another (as of 13 December 2020), according to HMRC.

Last year, the UK government passed a law that means furloughed workers will be entitled to redundancy pay based on their normal wages, rather than their reduced furloughed rate.

3. Being ‘at risk’ doesn’t necessarily mean you’ll be made redundant

Redundancy is one of the few legitimate reasons why an employer can terminate someone’s employment and they should notify you that you’re ‘at risk’ of redundancy.

However, this doesn’t necessarily mean that you will be made redundant. In some cases, your employer may try to redeploy you somewhere else.

You do have the right to refuse an offer of alternative employment. However, if you unreasonably refuse an offer of suitable alternative employment, it could mean you miss out on your statutory redundancy pay.

4. Your employer must follow a set of procedures under UK law

If your employer doesn’t follow the procedures required by employment law and you have worked there for more than two years, your dismissal could be deemed unfair.

For example, if your employer is reducing staff numbers in a particular role within the business, they must:

  • Identify a suitable pool of people to select from
  • Use fair selection criteria to decide who from the pool will be made redundant
  • Consult with each employee meaningfully about any possible alternatives to redundancy
  • Consult with trade unions/staff representatives if more than 20 redundancies are completed.

Failure to comply with the law means a claim can be made and may result in an employment tribunal finding the dismissal to be unfair. If the tribunal agrees that the dismissal is unfair, compensation may be awarded.

5. You can’t be made redundant in certain situations

The following is a list of some of the reasons why any selection for redundancy will automatically be deemed unfair:

  • Pregnancy
  • Being on maternity, paternity or parental leave
  • On the grounds of your sex, race, sexual orientation, any disability, gender reassignment, religion or belief
  • For whistle-blowing
  • For making a flexible working request
  • Your role as a representative for, or your membership of, a trade union
  • Working part time or on a fixed-term contract
  • Your membership of a trade union
  • Your work as an employee representative
  • Being a pension trustee
  • Reasons relating to your rights to minimum pay and working hours, including annual leave.

Your employer must give you a full explanation of why you have been selected for redundancy – and it must not include any of the reasons above or any other reasons that are deemed unfair.

6. You’ll usually get a notice period

The length of the notice period can vary depending on what’s in your contract and how long you’ve been with the company.

Statutory minimum notice periods in England, Wales and Scotland are:

  • At least one week if you’ve been with the company for between one month and two years
  • For those employed for between two and 12 years, a week for each year of employment
  • If employed for 12 years or over, 12 weeks.

In some cases, your employer may give you a longer notice period, regardless of how long you’ve worked for them.

If the company is unable to keep you on for your notice period (for example, if it’s going out of business), you’re still entitled to compensation for your notice period.

You may be offered payment in lieu of notice. This means your employer asks you to leave the firm earlier, but still pays you your basic salary for your notice period. Unless your contract says otherwise, it’s unlikely you will be entitled to the monetary equivalent of any entitlements/benefits you would have received had you worked your notice period, eg pension contributions.

7. You’re entitled to a redundancy package

Redundancy pay can depend on a number of factors, including what your contract says and what you agree to in your consultation.

Everyone who has been with the business for two or more years is usually entitled to statutory redundancy, which is worked out based on how long you’ve worked at the organisation (up to a maximum of 20 years’ service) and your age.

Age Redundancy pay per full year’s work
18-22 Half a week’s pay
22-40 One week’s pay
41 and older 1.5 weeks’ pay

In this situation, those made redundant (in England, Scotland and Wales) will have weekly pay capped at £538, with the maximum amount of statutory redundancy pay capped at £16,140.

In some instances, for example, if you refuse suitable alternative work without a valid reason, you won’t be eligible for statutory redundancy pay.

It’s worth noting that statutory redundancy pay tends to be a minimum and some employers may offer more, so make sure you discuss redundancy pay during your consultation.

Whether you’re offered more money or not, you’re still entitled to any holiday pay, commission and bonuses you are owed. These types of payments will be subject to tax. However, the rest of your redundancy package, whether statutory or extra, will not be taxed up to £30,000.

You can use our income tax calculator for 2020-21 to work out how much tax you’ll pay on your total income.

8. You’ll receive your redundancy pay in the same way you receive your salary

Your employer should pay your redundancy on the date that you leave the company or your next normal pay date. It will usually be paid into your bank account.

Your employer should also provide you with a written document explaining how your redundancy payment was calculated.

If your employer doesn’t pay you, or doesn’t pay you in the way that it should, you can write to them requesting payment.

If this doesn’t work, you have three months less one day from the date you should have received any outstanding salary, commission, bonuses or holiday pay, in which to issue a claim in the Employment Tribunal. Generally speaking, you have six months in which to issue a claim for an outstanding statutory redundancy payment, although it will be preferable to start proceedings as soon as possible.

Before issuing a claim, you first need to go through ACAS Early Conciliation. It will see if your employer will resolve the dispute without going to a tribunal. You need to start Early Conciliation within the three months less one-day deadline to issue a claim.

If your employer is insolvent and hasn’t paid you what you’re owed, you can claim from the National Insurance Fund by using the ‘claim for redundancy and monies owed’ service.

9. You could be entitled to claim Universal Credit

The government has announced changes to Universal Credit thresholds and allowances to help people that fall into financial hardship as a result of the coronavirus pandemic.

How much you get depends on your circumstances, including how much you earn, whether you have children and how many you have, and whether you’re unable to work.

The amount you have in savings could also affect how much you receive.

You can read our guides on how Universal Credit is calculated and what the government’s measures to protect wages mean for you for more information.

10. The government has launched a new job site

The government has launched a new Job Help site for people in England, Wales and Scotland, which currently lists over 65,000 roles. 

It’s also offering tips, including which sectors are recruiting, how best to use your transferable skills and how to secure a new role. 

There is a different service for jobs in Northern Ireland.

11. There’s a ‘kickstart’ initiative for younger workers

The government has also launched a £2bn Kickstarter initiative designed to help young people into work. 

Under the Kickstart scheme, the government will pay towards six months of wages for 16 to 24-year-olds who are claiming universal credit and are at risk of long-term unemployment.

It will cover 100% of minimum wage (ranging from £4.55 for under 18’s to £8.20 for 21 to 24-year olds), national insurance and pension contributions for a maximum of 25 hours a week. Although, companies can still top up wages if they wish. 

Firms may get up to £1,500 from the government to help them set up training and support for employees.

This story was originally published on 21 June 2020 and has since been updated. The latest update was on 11 February 2021 and included new information on unemployment figures.


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