Dealing with redundancy

Receiving the news that you are being made redundant is always devastating. After years of austerity and cuts, redundancies have been on the rise and unfortunately, the Coronavirus pandemic has created further job insecurity. 

Of course, if your company informs you that you’re losing your job, you’ll have a million questions and stress levels will be at an all time high. However, in situations like this, it’s always best to try and keep a cool head.

Figuring out where you stand in terms of employment rights and redundancy pay, and whether or not you can challenge your employer’s decision is a great place to start. Get informed, and take a breather.

Read on to discover the nitty gritty of redundancy, and know that you’re not alone on this journey, and there is light at the end of the tunnel.

What is redundancy

Redundancy occurs when a company or organisation makes the decision to reduce its workforce, and dismiss employees from their positions. This decision is made for a number of reasons. These include:

• Evolving technologies have made your role unnecessary
• The company that employees you is in financial turmoil, and cuts must be made
• The company that hired you is closing down or moving location
• The company you work for has been bought out by another company

The fair redundancy process

In order for an employer’s redundancy process to be fair, it must follow a few essential steps. The first stage of the fair redundancy process involves consultation with employees who may be affected by redundancy. These will be attended by either an elected representative or trade union representatives.

When the redundancies concern one-hundred or more employees, consultations should be held at least 45 days before employees are issued a redundancy notice. This reduces to 30 days, for redundancies concerning twenty to ninety-nine employees.

In addition to this, during the consultation period, employees must be informed of the reasoning behind the redundancies, how many people are expected to be made redundant, how this decision will be made, how the company intends to calculate redundancy pay.

The next stage involves the selection stage, whereby a company will create an objective criteria to assess factors like employee performance. A decision will then be made based on the following:

• An employee’s attendance record
• An employee’s performance or skill level
• An employee’s disciplinary record
• The importance of the employee’s role
• How long the employee has worked at the company (Last in, first out (LIFO))

This decision should not be made on the basis or either direct or indirect discrimination, or it will be classified as unfair dismissal.

Once a definitive selection has been made, an employer will reach the finalising stage. This will involve an employer issuing a written notice to those employees who are at risk. This should be followed by individual consultations with each “at risk” employee, whereby they will have the opportunity to appeal the decision.

Employers are also obligated to look for suitable alternative employment for you within the company. If this is not possible, the employee will be given a redundancy package.

What to do when selected for redundancy

If you find yourself in the unfortunate situation of being selected for redundancy, don’t catch yourself thinking it’s the end of the world. You still have options!

Firstly, don’t take it personally. When companies make the decision to start the redundancy process, it’s never an easy one. Perhaps the company is really struggling financially and it needs to downsize to stay afloat. Maybe your level of skill doesn’t match the expertise of your colleagues just yet. Either way, try not to see this redundancy as a fatal blow, but instead, as more of an opportunity to grow, and develop. Plus, keeping things amicable between you and your boss will likely lead to a better reference and perhaps consultancy work later on in the game.

That being said, there are instances where companies do not go about redundancy in the right way. And, in these instances, you are entitled to challenge a company’s decision.

Cases where this is appropriate include:

• You have been employed by the company for two, or more years, and you believe that your employer did not follow the correct redundancy procedure
• You believe you have been discriminated against
• You do not believe the redundancy decision was made as part of a genuine reason
• You believe that the redundancy was made for an “automatically unfair” reason

Once this has been established, your first port of call should be addressing your employer and bringing forward your concerns.

Whether this involves arranging a meeting, or writing a formal letter to your employer, explain your situation, and request that they reconsider their position.

Unfortunately, this isn’t always going to work, and you may need to take it one step further. You could appeal to HR after consulting the employee handbook. And remember, it is important that you instigate the appeal process as soon as you can, because there are time limits around this.

“Early conciliation,” is the first step you must take in order to pursue legal action against your employer. This must commence three months minus a day of the date your contract ends. During this period, it is important that you get in touch with Acas, as you cannot take your case to an employment tribunal without notifying the organisation.

Before your case goes to an employment tribunal, assess how strong your case is, and whether or not you have sufficient evidence. This is important, because it can be a pretty tough landscape to navigate, and you’re not guaranteed a win.

Redundancy pay

You will be entitled to redundancy pay if you’re legally registered as an employee under the company, and you’ve worked for said company for at least two years, prior to being issued a redundancy notice.

The amount an employee will receive as part of their redundancy package will vary depending on their age. Employees will receive:

• Half a weeks’ pay for each full year of employment under the age of 22
• One weeks’ pay for each full year of employment between ages 22 and 40
• One and a half week’ pay for each full year of employment not below the age of 41

Unfortunately, payments are not unlimited, and are instead capped at £525 a week. On top of this, statutory redundancy pay is cut off at £15,750. However, your company may be more generous and offer you a better redundancy pay package that exceeds the statutory limit.

One plus is that if your redundancy package is under £30,000, you will be able to enjoy it entirely tax-free.You’ll also be entitled to any holiday pay the company owes you for any untaken holiday!

Final thoughts

So, if you’ve just been informed that you’re being made redundant, it’s completely understandable that you’re feeling panicked and hopeless.

However, this is just the beginning of a new path in your career. Embrace this time and reassess your career goals, acquire new skills, and take a good look at your work-life balance.

Try to stay positive about the future, because, although these are very uncertain times, you never know what’s around the corner. This is simply the start of a new chapter, and who knows, it may even be better than the previous one.