Being made redundant

Being told you're no longer needed is never nice - it's not just your finances but also your confidence that's likely to take a hit. Unfortunately, the current economic crisis means that even if you've received rave reviews in appraisals, you could still be in line for redundancy.

"Your job has effectively disappeared from within your organisation."

Facing the heave-ho?

If your employer is among those suffering a decline in business, they may have no choice but to cut staff. Being unexpectedly unemployed is far from ideal, but try not to panic if your payslip comes with a P45 – losing your job isn't the end of the world and it could even provide an opportunity to move on to something bigger and better.

What is redundancy?

If you are made redundant it means your job has effectively disappeared from within your organisation – an employer cannot make you redundant and then hire someone else to do your job. However, if you work for a large company and many people work in the same role as you, your employer may keep some staff and dismiss others.

What are my rights?

Your employer should consult with you first to explain the reasons for the possible redundancy and discuss alternatives, such as moving you to another position.

If your employer is making more than 20 people redundant at the same time, this is called a collective redundancy and they must consult with employee or union representatives. Employers should have a fair, objective and transparent selection process for choosing which individuals are being let go. If you believe the selection process is unfair, you may have been unfairly dismissed and you can complain to an employment tribunal (or industrial tribunal in Northern Ireland).

If you've been in the job for between one month and two years, they must give you at least one weeks' notice. For those employed for between two and 12 years, you must get at least one weeks' notice for each year of service. You should also be given time off to look for new employment.

What compensation will I get?

Many people think redundancy comes with a big fat pay packet, but statutory redundancy pay is actually rather modest. Here are the facts:

You are only entitled to statutory redundancy pay if you've been with your employer continuously for at least two years.
It is only available to those who are employees – if you're self-employed, freelance or were employed through an agency you're unlikely to have the same rights as employees. However, new legislation is expected to be passed this year that will give agency workers who've been in continuous employment for 12 weeks the same rights as permanent employees, so this may change in the future.
You are entitled to half a weeks' pay for every year you've worked for the company if you're 22 or under, and a whole weeks' pay for each year if you're between 22 and 41.
The amount you receive is based on your gross weekly earnings at the time you are made redundant, but the maximum statutory redundancy pay is £350 per week, though in the 2009 Budget it was announced that this figure will rise to £380 per week.

These are only the minimum obligations your employer has, so it's important to check your employment contract in case you're entitled to a higher amount.

Who can I turn to?

If you don't think your employer is playing by the rules, start by raising the issue with them, perhaps via human resources or following internal grievance procedures. Trade unions may also negotiate on your behalf if you're a member. Everyone has the right to belong to a union; if you're not sure which union is most appropriate for you, consult the Trade Union Congresses Union Finder. You can also consult the Advisory, Conciliation and Arbitration Service or the Citizens Advice Bureau (CAB) for detailed advice relating to your personal circumstances.

By Joanne Christie

Jargon Buster

P45:: Slip of paper given when your contract is terminated.
Employment Tribunal:: Way of resolving disputes with your employer.
Gross earnings:: Earnings before tax and other contributions (such as National Insurance and pension) are deducted.

Make sure you get a reference from your current employer – this will help you secure another job.
Register with the Jobcentre and recruitment agencies relevant to your industry and skills.
Try to remember that being made redundant isn't personal and doesn't reflect on your skills or job commitment. It could be a good opportunity to change jobs without anyone questioning your motives.
Read our article on coping with redundancy for advice on staying motivated.
Find out about retraining. You may even be eligible for a scheme that offers free education, e.g. the Redundancy Action Scheme in Wales.
If you are unable to find a new job before your employment ends, you may be able to apply for Jobseeker's Allowance. Depending on your personal situation, you may also be able to claim other allowances, such as Housing Benefit and Council Tax Benefit. Contact your nearest Jobcentre Plus to find out exactly what you're entitled to.

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