Facing Redundancy, What Are Your Rights

Facing Redundancy, What Are Your Rights

Your legal rights in a redundancy situation

Before any employee is made redundant they must first be informed that their role is ‘at risk’, and must be invited to take part in a consultation.

This consultation must explore any possible alternatives to making you redundant, such as re-deploying you to another role within the company. If you decide to take an alternative role, you are entitled to carry out the role on a trial basis for up to four weeks. If at the end of this period, you then decide that the new role is not suitable for you, you can still choose to leave the company and receive any statutory redundancy pay to which you are entitled.

Regardless of the time you have been with the company, you have a legal right to either work the notice period specified in your contract, or to be paid your full wages in lieu of notice for this period. If there is to be a selection process whereby some employees will be made redundant and others will be retained, then no matter how long or short a time you have been with the company, you have the right to expect that the selection process will be fair and non-discriminatory.

After two years’ service, you gain additional rights in a redundancy situation. You have the right to take time off work to attend interviews or to undertake additional training to boost your chances of finding new employment. You also become entitled to statutory redundancy pay after two years’ service, up to a maximum of £14,370. This amount is calculated as:

  • Half a week’s pay for each full year of service while you were aged under 22
  • One week’s pay for each full year of service while you were aged between 22 and 40
  • One and a half weeks’ pay for each full year of service while you were 41 or older

(All subject to a maximum of 20 years’ service)

Your contract may also entitle you to receive an additional redundancy payment over and above the amount of the statutory payment. Alternatively, it may dictate that you receive payment in lieu of annual leave not taken at the time your employment ceases.

When it tells you your role is at risk, your employer may offer you a ‘settlement agreement’. There is no obligation to accept the terms of this settlement, and it is a requirement you take independent legal advice before entering into any such agreement. A settlement agreement is a legally binding contract setting out what termination payment and other severance benefits you can expect, and once entered into, prevents you from taking legal action regarding the circumstances of your departure.

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