What is redundancy?

Redundancy is a form of dismissal from your job, caused by your employer needing to reduce the workforce.

Reasons for redundancy can include:

• new technology or a new system has made your job unnecessary

• the job you were hired for no longer exists

• the need to cut costs means staff numbers must be reduced

• the business is closing down or moving

Collective redundancies

If your employer is making 20 or more employees redundant in one establishment within a 90 day period, this is a collective redundancy.

If your employer is thinking about making collective redundancies, they have a duty to consult with the representatives of employees that could be affected.

If your employer fails to consult the representatives then a claim may be made to an Employment Tribunal for a protective award (a monetary award of up to 90 days pay).

Individual redundancies

If your employer is making less than 20 employees redundant in one establishment they must follow certain procedures:

• your employer should select the employees fairly · you should be warned and consulted about the redundancy

• your employer should take reasonable steps to redeploy affected employees

• you should get any redundancy pay you are due, and be given the correct amount of notice

• your employer should consider any alternatives to redundancy

If an employer uses redundancy to cover up the real reason for ending your employment, or if they do not carry out the redundancy procedure properly, it may amount to unfair dismissal.

Redundancy Notice Periods

If your employer has selected you for redundancy you must be given a notice period before your employment ends. The statutory redundancy notice periods are:·

• at least one week’s notice if you have been employed between one month and two years

• one week’s notice for each year if employed between two and 12 years

• 12 weeks’ notice if employed for 12 years or more

However, you should also check your contract of employment because your employer could have set out longer notice periods.

Coping with redundancy

There is a range of support available to help you cope with redundancy. You can find out your rights, search for work and get practical help when applying for jobs via the JobCentre  You can also use DirectGov's online benefits adviser to find what benefits you and your family may be entitled to.

Leaving your job

On your last day at work you should receive all the wages you are entitled to, plus payment for any outstanding period of notice that you have not worked.

You should receive:

• accrued holiday pay (payment for holiday owed which has not been taken)

• Income Tax form P45

• redundancy pay

• a letter stating the date of redundancy

Finding work

Jobcentre Plus has Britain’s largest database of job vacancies. You can use the jobs and skills search to find a job that is suitable for you. You can also get tips on how to fill in application forms and prepare for job interviews by following the links below.

Claiming benefits after redundancy

As part of your benefit claim, you may be asked about any redundancy payments you have had from your employer. Your Jobcentre Plus adviser will explain whether these payments will have any effect on your claim. You or your partner may get a payment from your employer when your job ends, eg final pay, wages if you worked a week in hand, holiday pay. These payments are not taken into account when considering your claim for Jobseeker’s Allowance or Income Support.

You can use DirectGov’s online benefits advisor to help you find out which benefits you are entitled to.

How your retirement might be affected 

If you are worried or have questions about how saving for your retirement might be affected by redundancy, you can contact the Pensions Advisory Service It is an independent not-for-profit organisation that provides free information and guidance. The service can also help you if you have a problem, complaint or dispute with your occupational or private pension provider.

Redundancy pay

How much redundancy pay you get depends on your wage, how long you have worked at the company and your age. If you are trying to work out your redundancy payment, find out how it is calculated or use the online calculator.

Statutory redundancy pay

The calculation for your statutory redundancy pay is based on:

• how long you have been continuously employed

• your age

•  your weekly pay, up to a certain limit (£380 current maximum)

You will get:

• 0.5 week’s pay for each full year of service where your age was under 22

• 1 week’s pay for each full year of service where your age was 22 or above, but under 41

• 1.5 week’s pay for each full year of service where your age was 41 or above

• For example: If you were 45, your weekly pay is £380 per week and you have completed 15 years’ full service, you will receive £6,460 statutory redundancy pay.

• Step one: 1.5 weeks x 4 years full service when you were 41 or above = 6 weeksStep two: 1 week x 11 years service when you were under 41 = 11 weeksStep three: 6 weeks + 11 weeks = 17 weeks x £380 (max weekly wage) = £6,460 statutory redundancy pay

• DirectGov’s online calculator can help work out how much statutory redundancy pay you might be entitled to.

Where to get help if you are made redundant

ACAS Helpline

ACAS (The Advisory, Conciliation and Arbritation Service) offers free, confidential and impartial advice on all employment rights issues.