Q&A: What you need to know about redundancy

Worried about redundancy? Martyn James talks you through what you need to know. Picture: Resolver/Getty

Worried about redundancy? Martyn James talks you through what you need to know. Picture: Resolver/Getty


It’s easy to feel a bit lost when whispers of job cuts start swirling around, writes Martyn James of Resolver.

After all, the decision often seems largely out of your hands. 
Here’s a short guide to redundancy and your rights.

First things first, the government has a guide to the process of redundancy and how it works and your rights. It’s a good starting point if you don’t know where to turn:

Redundancy comes with all kinds of caveats, so there may be exceptions to your entitlements depending on what you do for a living, how you were dismissed and more.

MORE: Martin Lewis of MoneySavingExpert: Six ways to slash your council tax bill

- How much could you get?

Statutory redundancy pay is normally given if you’ve been employed for two years or more. This is age based so you could get:

• Employed when under 22: half a week’s pay for each full year you worked.

• 22 to under 41: One week’s pay for each full year you worked.

• 41 and over: One and a half week’s pay for each full year you worked.

Statutory redundancy is capped at 20 years and a maximum of £538 a week.

You can calculate what you might be entitled to on the government website here:

Your employer may have a more generous redundancy package so check your contract. This is known as ‘contractual redundancy’.

There’s been some reports in the news that people might only be paid their smaller, furloughed wage.

I’ve spoken to a number of employment law specialists and the majority agree that your redundancy pay should be based on your normal wage, not your furloughed wage.

- How much notice would you get?

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The statutory notice periods are:

• Employed from one month to two years: one week.

• Between two to 12 years: One week for each year.

• Over 12 years: 12 weeks

Again, your employer may give you longer notice periods. You should be paid through the notice period too.

If your contract says you can be paid ‘in lieu of notice’ that means they can let you go, but they still have to pay you during the notice period.

You may hear about ‘gardening leave’ too.

This means you are not actually working for your employer, but you are legally still employed, which means you can’t start a new job during this period, you might be recalled and you have to stick to your work contract rules.

- What about holidays?

Fed up with the whole process? Yes you can take holiday during your notice period – if your employer says it’s okay.

Many businesses will be looking nervously at the amount of holiday accrued over lockdown, so it’s possible you may be asked to take holiday during this period.

They can make you do this, but they have to give you two days notice for every day of holiday they want you to take. So if you have seven days holiday they need to give you 14 days notice in advance of when they want you to take the holiday. Oh and any untaken holidays must be paid too.

- What if you’re on maternity/sick leave?

Your redundancy pay should still be based on your normal pay if you’re on maternity or sick leave, even if you’re earning less than your usual wage.

Your HR team or the business itself should ensure that you are fully involved in any consultation and decisions made about your job too.

- What next?

Talking about redundancy fears is never easy, but it makes sense to prepare yourself if you think you might be affected.

Knowing your rights gives you more time to prepare for everything from job hunting to planning your finances. I’ll be covering this in more detail soon.

In the meantime get help at the free Resolver website:

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