Redundancy FAQs image

Redundancy FAQs

Staff Squared date icon25th October 2019

Tag iconOperations

If you’re faced with redundancy, your employer must treat you fairly and act in accordance with your contract and legal redundancy rights. That includes making sure you’re consulted, following the right selection process and giving you a proper notice period. If not, then you could have a claim for unfair dismissal or claim compensation for lack of consultation.

Understandably, there are many questions surrounding redundancy and what it means for you if you are made redundant by your employer. We’ve pieced together some of the most frequently asked redundancy questions along with answers to clear up any uncertainty you may have. 

What is Redundancy?

Redundancy is when an employer reduces their workforce because a job or jobs are no longer needed. 

What are the Common Reasons for Redundancy?

There are lots of reasons why you might be made redundant, and they usually aren’t a reflection on your ability to do the job. These can include:

  • New technology has made your job unnecessary.
  • The department or job you were hired to do no longer exists.
  • Your employer needs to cut costs by reducing staff numbers.
  • The business is closing down or moving.
  • The business has been bought by another company.

How do Employers Choose Who to Make Redundant?

There should be no prejudice reasons for an employer choosing who to make redundant and this decision should be explained to the employee.

The reasoning behind redundancy selections can include:

  • Attendance record
  • Disciplinary record
  • Skills or experience
  • Standard of work performance
  • Successes at work – or lack of them.

An employer may also include qualifications and skills as part of their reasons, but it should not be based on these alone. 

When are Redundancies ‘Unfair’?

You will be found to have been unfairly dismissed if you were selected for redundancy:

  • For asserting a statutory employment right.
  • On parental leave or maternity-related grounds.
  • Because you work part-time.
  • Because you are a fixed-term worker.
  • For exercising or seeking to exercise the right to be accompanied at a disciplinary or grievance hearing.
  • Requesting flexible working arrangements.
  • For a reason relating to rights under the Working Time Regulations 1998.
  • For a reason relating to rights under the National Minimum Wage Act 1998.
  • For a reason relating to the Tax Credits Act 2002.
  • For Whistleblowing.
  • For participation in trade union activities, for membership or non-membership of a trade union and in respect of trade union recognition or de-recognition.
  • For carrying out duties as an employee representative or candidate for election for purposes of consultation on redundancies or business transfers.
  • For taking part in an election of an employee representative for collective redundancy purposes.
  • For taking action on health and safety grounds as a designated or recognised health and safety representative, or as an employee in particular circumstances.
  • For taking part (or proposing to take part) in consultation on specified health and safety matters or taking part in elections for representatives of employee safety.
  • For taking lawfully organised industrial action lasting eight weeks or less (or more than eight weeks in certain circumstances).
  • For refusing or proposing to refuse to do shop work or betting work on Sundays (England and Wales only).
  • For performing or proposing to perform the duties of an occupational pension scheme trustee.
  • For performing or proposing to perform the duties of a workforce representative for the purposes of the Transnational Information and Consultation of Employees Regulations 1999.

Can an Employer Replace you After Making you Redundant?

It is not considered redundancy if you lose your job and the employer replaces you in the same position straight away. However, if you have been made redundant – and to clarify, I mean that you were told by your employer that the department or position you were made redundant from no longer exists within the company – and you find clear evidence that this is not true, you can claim unfair dismissal. 

However, be aware that this does not rule out the possibility of the employer’s circumstances changing. They may well have needed to close down that role or department for commercial reasons, but later found that they were able to reopen it again. 

Can I Appeal a Redundancy Decision?

You have a right to appeal your redundancy if you believe that the decision has been made unfairly or that your employer did not follow a fair process. 

You should talk to your employer first and check if they have an appeals process. If they do not, you can write to them explaining why you think the redundancy is unfair.

If your appeal is rejected but you still believe that the decision was made unfairly, you can make a claim to the employment tribunal

What is Redundancy Pay and How do I Work out what I’m Entitled to?

You have the right to a lump sum ‘redundancy payment’ if you are dismissed because of redundancy. The amount is related to your age, length of continuous service with the employer, and weekly pay up to a maximum.  In addition to this, some organisations pay an enhanced payment which will be in your Terms & Conditions.

The employer must also provide you with a written statement showing how the payment has been calculated at or before the time it is paid.

What if I Disagree with the Amount Paid to me?

Any dispute about whether a redundancy payment is due, or about its size, can be determined by an employment tribunal. 

Will I Still get a Payout if my Employer Goes into Insolvency?

If your employer is insolvent, the Redundancy Payments Service (RPS) makes the payment and the debt is recovered from the assets of the business. Any money owed from time worked for the employer will also be taken into consideration and dealt with by the RPS. 

If your employer hasn’t gone insolvent, but their cash-flow problems are so serious that making the redundancy payment would put the future of the business at serious risk, the RPS can arrange to pay you directly from the National Insurance Fund. 

How much Notice are Employees Entitled to?

The employer must give at least one week’s notice for each full year of continuous employment for up to 12 weeks.

For example, if an employee has worked for 5 full years then they would be entitled to 5 weeks notice. However, if an employee’s contractual notice is more than the statutory notice, the employer should give the greater amount.

Should my Employer Help me to Find Other Work?

In addition to allowing time off to look for new work or for training, it’s good practice for employers to give redundant employees as much information as possible to help them at this difficult period of their working lives. This information may include:

  • How they may be affected financially (redundancy pay, pension payments and state benefits).
  • How to complete application forms and present themselves at job interviews.
  • The importance of discussing the implications of redundancy with their family as early as possible.
  • How to search for appropriate vacancies and follow up opportunities.
  • The importance of being prepared to consider a wide range of alternative jobs.
  • Individual counselling where appropriate, ideally before redundancies take effect.

What Information Must my Employer Disclose about Proposed Redundancies?

Your employer must disclose certain information in writing to ensure employee representatives can play a useful part in the consultation process over proposed redundancies. This should include:

  • Why redundancies are taking place.
  • How many, and what types of employees it may affect.
  • The kind of procedures will be used to select employees for dismissal.
  • How dismissals will be carried out and the timeframe.
  • How redundancy payments, other than the legal minimum, will be calculated.

For more information on your rights surrounding redundancy, head to the ACAS website

Have we missed any questions that you feel should be included in our Redundancy FAQs guide? Leave us a comment.

Written by Clarisse Levitan

Lead Customer Care Agent - Staff Squared

Clarisse works as the Lead of our Customer Support Team to provide all of our customers with the very best care and guidance when using their HR software.

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