Redundancy - redundancy selection, the notice period, and redundancy pay

The process of being made redundant or making redundancies is an upsetting and stressful time for all involved. On the one hand, no one wants to lose their job, especially if they are extremely happy in it, due to the worry of having to find another one, which can be particularly difficult for those nearing a pensionable age.

Redundancy is just as fretful for the business-owner or employer making the redundancies, as they will have to bear the responsibility of potentially putting people's livelihoods in jeopardy on their shoulders.

Reasons for redundancy

There are numerous reasons for being made redundant and they all generally fall into one of the following categories:
  • Your employer has to reduce costs to be able to survive
  • New technologies deem your job unnecessary
  • Your business is being taken over by or merging with another company
  • The business you work for is closing
  • Your company is going into a new line of business and your department will cease to exist
  • Your employer is moving to another area (generally to an area where costs are cheaper)
  • A colleague's job is no longer needed and they are brought in to take over your position

Selecting who goes

When selecting which of the staff in a company will lose their jobs, the employer has to make sure that the selection process is fair and objective. If this is not the case, in the UK, the employee(s) that has (have) been made redundant may be able to sue on the grounds of unfair dismissal.

In some cases it will be clear who will have to leave their job, for example, if a whole department's role is no longer necessary, then those that work in that department will have to go.

If the task of making redundancies is less clear, then the employer can base his decision on predetermined criteria which may include the following:
  • Length of service at the company. It is generally accepted that the last one in is the first one out
  • Disciplinary records
  • Competence at the job
  • Experience and capability

Is it really redundancy?

If the decision for your redundancy is not clear and seems unfair, in the UK you should seek advice from your trade union, from ACAS (Advisory Conciliation & Arbitration Service), who offer free and confidential advice, or from your local Citizen's Advice Bureau.

In the UK, redundancy cannot be based on any of the following discriminatory grounds:
  • Age
  • Gender
  • Sexual orientation
  • Race or religion
  • Marital status
  • Pregnancy
  • Disability
  • Trade union membership
  • Political membership
  • If taking court action against employer

Notification and consultation

All those that have been selected for redundancy should be consulted by their employer first before a decision is made, and the consultation should take place in person rather than by any other means. A redundancy issue cannot be made until this initial consultation has taken place.

Alternative employment or training

Before making any redundancies, your employer first should consider all alternatives. This may include offering you another job within the company, as long as you have the necessary skills to do the work, or sending you on a training course in order to gain extra qualifications that would mean that you could fill another role.

Notice period

Your employer should always give you notice if you have been selected for redundancy. He is not allowed to make you redundant on the same day that he tells you of his decision.

In the UK, if you have worked for the company for any length of time between one full month and two years, then you should be given at least one week's notice. An additional week is given for each full year that you have worked from 3 years upwards, and up to a maximum of 12 years.

Statutory redundancy pay

If you have worked for the company for a year or more, you will be entitled to redundancy pay. In the UK, this is calculated on your length of service; your age; and your weekly salary (up to £380).
  • If you are between the ages of 18 and 21 you should receive 0.5 week's pay for each full year of service.
  • If you are aged between 22 and 41 you should receive 1 week's pay for each full year of service in the company.
  • If you are over the age of 41 but under the age of 65 you should receive 1.5 week's pay for each full year of service.

Time off

If an employee has been selected for redundancy, he or she must be given a certain amount of time off work to look for another job and to attend interviews.

It's not all bad

Sometimes being made redundant is not such a bad thing, especially if you didn't like your job, were thinking of leaving anyway or you received a big payout. This may be just the push needed in order for you to take control of your life and possibly think about doing something that you had previously only dreamed of.

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