Redundancy is usually a type of dismissal when a role is no longer needed. Your employer should only consider making redundancies if part or all of the organisation is:
- closing, or has already closed
- changing the types or number of roles needed to do certain work
- changing location
Your employer should tell all employees as soon as possible that they are considering making redundancies. They should explain:
- which roles are at risk of redundancy
- why the redundancies are being considered
- how many redundancies they’re considering
- what happens next, including how everyone will be consulted
If you are at risk of redundancy, the employer should also confirm:
- the outline of their consultation plans
- whether you have other options, such as voluntary redundancy or suitable alternative employment
This should be in writing, for example in a letter or email.
When your employer is proposing to make redundancies and your role is at risk, you can put yourself forward for redundancy before being selected. This is called ‘voluntary redundancy’.
Your employer must consult with all staff affected. The consultation is a chance for your employer to talk about the changes they’re proposing and why you’re at risk of redundancy.
You can ask them questions and make suggestions on how redundancies could be reduced or avoided altogether.
You could discuss:
- ways to avoid or reduce redundancies
- how people will be selected for redundancy
- any issues you have with the process
- time off to look for a new job or training
- how the organisation can restructure or plan for the future
Your employer should use selection criteria to decide who to make redundant, these criteria should be as objective and measurable as possible. This means the selection criteria should:
- be fair
- be based on facts that can be measured
- not be affected by personal opinions
Examples of selection criteria could include:
- standard of work or performance
- skills, qualifications or expertise
- attendance record, which must be accurate and not include absences related to disability, pregnancy or maternity
- disciplinary record
If you’re being made redundant, your employer must:
- tell you how long your notice period is – whether it’s ‘statutory’ (minimum required in legislation) or contractual
- keep paying you until the end of your notice period
You’ll usually carry on working until the end of your notice period. The minimum notice you get will depend on how long you’ve worked for the employer. You should check your contract as you might be entitled to more.
It’s a good idea to talk with your employer if there’s any part of your redundancy notice you’re not sure about. For example, you could ask them to put in writing:
- the length of your notice period
- the date your notice period starts
- if you can leave before the end of your notice period
- if you need to take any unused holiday before you leave
- if you’ll still get contractual benefits, for example a fuel card or mobile phone, during your notice period
- how to request time off to arrange training or find a new job
How much redundancy pay you get depends on:
- your age
- how long you’ve continuously worked for your employer
Your employer might top up the ‘statutory’ minimum amount (required by law) – this is called enhanced or contractual redundancy pay.
Up to £30,000 of redundancy pay is tax free.
You may not be eligible for statutory redundancy pay if your employer offers you a suitable alternative job and you turn it down.
Redundancy pay is based on:
- your weekly pay before tax (gross pay)
- the years you’ve worked for your employer (‘continuous employment’)
- your age
Weekly pay should also include:
- ‘guaranteed overtime’ agreed in your contract – this is overtime your employer must offer and you must work
- any bonuses or commission
If your weekly pay varies, your redundancy pay will be based on your average hourly rate over a 12-week period.
If you’re aged 17 to 21, your employer must give you half a week’s pay for each full year you’ve worked.
If you’re aged 22 to 40, your employer must give you: 1 week’s pay for each full year you worked from age 22, half a week’s pay for each full year you worked before that
If you’re aged 41 or over your employer must give you: 1.5 week’s pay for each full year you worked from age 41, 1 week’s pay for each full year you worked when you were between 22 and 40, half a week’s pay for each year you worked when you were between 17 and 21
Your employer must tell you in writing how your redundancy pay has been worked out.
Use the redundancy pay calculator on GOV.UK. You’ll need to know your weekly pay (before tax and other deductions) to use the calculator.