Nearly seven in 10 employers expect to make redundancies within the next year, the majority of which will take place within the coming months, according to new research.
The study, from outplacement and career transition specialists Renovo, found 69% of all UK employers anticipate job losses, with 46% of organisations expecting to make redundancies within six months, while 23% anticipate redundancies within six to 12 months.
It comes as the government’s Job Retention Scheme, or furlough, ended on 30 September, which means companies will have to make decisions over the future of employment for their furloughed workers. Renovo’s research shows that of the employers considering redundancies 84% have employees on furlough.
Here, Which? with the help of Which? Legal explains the key things you need to know if you’re at risk of being made redundant.
- Which? Legal can offer its members personal advice on redundancy. Visit Which? Legal to find out more.
1. You may not get a Universal Credit uplift for much longer
If you are made redundant, you may not benefit from the Universal Credit uplift of £20 a week for much longer, which was introduced in April last year.
There have been numerous calls to the government to keep it in place, prime minister Boris Johnson is concerned about the cost of maintaining the increase.
How much Universal Credit you’re entitled to depends on a variety of factors such as how much you have in savings and your age.
- Find out more: Universal Credit explained
2. Jobseekers will be offered coaching and advice
The government has introduced a programme called Job Entry Targeted Support (JETS) for people who have been out of work and claiming either Universal Credit or New Style Jobseeker’s Allowance for at least 13 weeks.
Your Jobcentre Plus work coach can explain how support from the JETS programme can help you get back to work. This might include specialist advice on how you can move into growing sectors, advice on building your CV, and interview coaching. If your work coach agrees that JETS is right for you, they will refer you to the JETS programme.
JETS will provide light touch, personalised employment support for 6 months, which could give you the boost you need to return to employment.
A full list of the counties offering the service and when the service will be live is available here.
For more information, you can contact Jobcentre Plus on 0800 169 0310.
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 proposed within a period of 90 days.
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. If you are dismissed and have the requisite two years’ service, you will have three months less one day from the date your employment ends in which to issue a claim. Prior to issuing a claim you need to contact the conciliation service ACAS to commence Early Conciliation.
- Find out more: what to do when you’re facing redundancy
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:
- Being on maternity, paternity or parental leave
- On the grounds of a protected characteristic, including 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 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. You should seek advice to find out whether your selection for redundancy could fall into one of automatically unfair reasons (the above list is not exhaustive), and if so, what action you can take.
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|
|Up to 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 £544, with the maximum amount of statutory redundancy pay capped at £16,320.
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.
You can use our income tax calculator for 2021-22 to work out how much tax you’ll pay on your total income.
- Find out more: how to calculate redundancy pay
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 also claim from the National Insurance Fund by using the ‘claim for redundancy and monies owed’ service.
9. The government has launched a new jobs 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.
- Keep up to date on the latest coronavirus news and advice with Which?
11. There’s a ‘kickstart’ initiative for younger workers
The government has also launched a 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, 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 1 October 2021 and included new information on government initiatives to keep people in work as the furlough scheme closes.