Being told your role is redundant can be a stressful and overwhelming experience. Your first thought is probably “what on earth do I do now?”. Here are some of the first steps you should take:
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Speak to a solicitor – there are many steps you can take yourself but it is usually worth speaking with a solicitor, particularly if you feel you have been treated unfairly during the redundancy process or that your role is not really redundant. If you have received an offer of enhanced redundancy pay under the terms of a settlement agreement, it is a legal requirement that you seek advice from a qualified solicitor. Your employer should contribute to this advice and your solicitor will be able to confirm whether you have received the correct pay and discuss any claims which you may have with you.
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Find out your notice period – one of the first things you need to know is what your notice period is and whether you will be working it. You need to know how long you have to find a new job. Your contract of employment will tell you the length of your notice period and whether your employer has the right to place you on garden leave or make a payment in lieu of notice. Garden leave means that you remain employed for the whole notice period but don’t need to work it. Payment in lieu of notice means your employment ends immediately and you will receive a payment equivalent to your salary for the notice period. If you don’t have a contract, your notice period will usually be statutory notice, which is (after the first two years) one year for each complete year of employment, up to a maximum of 12 weeks. So, for example, if you have been employed since 10 June 2018 and are made redundant on 10 April 2023, you have been employed for 4 years and 10 months. Your statutory notice will therefore be 4 weeks.
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Check your notice pay – Your contract may also tell you what your notice pay will be. This is something to check carefully because often payments in lieu of notice are payments in lieu of basic pay only, meaning that you might miss out on benefits such as commission or travel allowances. If you don’t have a clause in your contract setting out how payments in lieu of notice is calculated, the situation can be complex and it is worth seeking advice to ensure you are being correctly paid.
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Calculate your redundancy pay – statutory redundancy payments are calculated based on your age, length of service, and your pay. You can use the Government’s calculator to check what you are owed. You may also be entitled to enhanced redundancy pay if this is in your contract or if your employer has such a policy (usually applicable in very large companies) so it is worth checking the staff handbook as well.
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Work out your tax – As a general rule, the first £30,000 of redundancy payments are tax free. However this will only apply to statutory or enhanced payments for redundancy. It would not apply to notice pay, your final salary payments, or payment in lieu of accrued but untaken holiday.
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Take time off to look for work – when you have been put on notice of redundancy, your employer must legally give you time off to look for other work, but only if you would have been employed for more than 2 years at the end of your notice period. The time you can take is ‘reasonable’ which depends on many factors including the length of your notice period, how many hours a week you work, how far you have to travel for work and your employer’s need for you to be at work during your notice period. No matter how much time you take offer, you will only ever be paid for 40% of your working week. This means that if you worked 5 days a week, you could only be paid for up to 2 days to look for other work, unless your contract entitles you to more than this.
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Ask about outplacement services – Some employers offer outplacement services which assist employees in finding alternative roles. The services range from help with your CV to interview preparation and training. If you have been with your employer for a long time, or are considering a career change, outplacement services can be very useful and often your employer will contribute to or cover the cost.
If you have any queries about redundancies or other employment matters, contact Charlotte Braham on 01494 893529 or by email.