Even with the easing of lockdown and slow return to normality, the announcement the UK has entered the largest recession on record has made it abundantly clear that things might not get back to normal for quite some time.
Unemployment statistics paint a similarly stark picture, with the Bank of England predicting unemployment will jump from the current rate of 3.9% to 7.5% by the end of the year – around the equivalent of one million jobs.
The news follows reports last month that almost one-third of companies in the UK are preparing to lay off staff.
While it’s important not to weigh yourself down with what-ifs and worry about hypothetical scenarios, it is important to understand what your rights are if you are made redundant and what the valid selection criterion are.
Here are the answers to your most-asked questions on redundancy.
What is the meaning of redundancy?
First thing’s first – what does ‘redundancy’ actually mean?
‘A situation in which someone loses their job because their employer does not need them,’ according to the Cambridge Dictionary.
Why do companies make people redundant?
Companies make people redundant when they reduce their workforce because certain roles are no longer needed.
Common reasons for redundancy include:
- The job you were hired to do no longer exists
- The business is closing or has been bought by another company
- The business is changing direction and your role is no longer required
- The business needs to reduce staff to save costs
This list is not exhaustive.
Who is most likely to be made redundant?
Because employers are obliged to use objective reasons for selecting people for redundancy, no specific group of people should be more vulnerable.
However, if you have poor attendance, bad timekeeping, are fairly new to the role, don’t have the relevant skills or experience or hold a disciplinary record, you may be more at risk.
Am I entitled to redundancy pay?
If you have worked with your current employer for two years or more, you’ll normally be entitled to statutory redundancy pay.
Typically, employers have a redundancy policy which sets out their entitlement to redundancy pay and in many cases, this will be superior to the legal minimum.
What redundancy pay am I entitled to – where can I access the calculator?
The legal minimum amount you’ll get depends on your age, length of service, and weekly salary.
According to the government’s website, you are entitled to:
- Half a week’s pay for each full year you were under 22
- One week’s pay for each full year you were 22 or older, but under 41
- One and half week’s pay for each full year you were 41 or older
The length of service is capped at 20 years.
From those made redundant on or after April 6, 2020, the maximum statutory redundancy pay is £16,140, but your employer may offer a more generous contractual redundancy payment.
Find out what you would be entitled to use the Government’s statutory redundancy pay calculator.
Can you be made redundant on furlough?
While the aim of the furlough scheme was to retain jobs during the pandemic, employers can still make employees redundant if they are on furlough.
According to Citizens Advice, if you’re entitled to redundancy pay, it will be calculated using the amount you earned before you were furloughed.
The Citizens Advice website offers advice on whether employees are entitled to redundancy pay and, if so, how much.
Am I more likely to get made redundant if I’ve been furloughed?
Being on furlough does not, by default, make you more susceptible to being made redundant – and employers must follow the same procedure as they would for any other staff.
However, if you were put on furlough because there is a diminished need for your role, then you may be at higher risk.
Tom Long, employment partner at law firm, Shakespeare Martineau told Metro.co.uk: ‘Where employees were furloughed it would suggest that there was a diminished need for their work to be carried out. The question is then whether the need for that work has increased again. If it has not, or has not increased sufficiently, that may lead employers to conclude that they need to make redundancies.
‘It is unlikely that the fact you have been furloughed will be used as a reason in any redundancy selection exercise, as there was no requirement for objective fairness when selecting who would be furloughed, which means that your employee rights are not affected.
‘An employer should ensure that all employees at risk of redundancy are evaluated in the same way, irrespective of whether they have been furloughed or not.’
How many people have been made redundant due to coronavirus?
It’s not yet clear yet how many workers will be made redundant due to the coronavirus pandemic, but recent figures from the Office for National Statistics (ONS) reveal the number of UK workers on payroll fell by 730,000 between March and July.
The tumble in employment numbers was ‘in large part’ due to the coronavirus crisis, with the largest falls being among the youngest and older workers in ‘lower-skilled’ jobs.
Is ‘last in, first out’ a valid selection criterion for redundancy?’
Redundancies often hit new starters worse, due to a common method of redundancy selection, dubbed ‘last in, first out’ (LIFO), leading some to question how legal it is.
And there’s bad news on that front for fresh starts, because length of service is indeed a commonly used (and legitimate) criteria for redundancy.
Common criteria include:
- Length of service
- Disciplinary records
- Staff appraisal results, skills, qualifications and experience
- Timekeeping and performance
Can you be made redundant if you were off work due to shielding?
Research released by Citizens Advice last week revealed people who have been shielding are ‘twice as likely’ to be made redundant.
The study – which was based on a survey of 6,000 adults – showed that one in four disabled people and two in five people with caring responsibilities are ‘facing’ redundancy.
If you were shielding you may – like everyone else – be made redundant, but your employers would have to prove it was a fair dismissal, and that you were not selected on any of the following grounds:
- Marital status
- Sexual orientation
- Religion or belief
- Membership or non-membership of a trade union
- Working pattern, e.g. part-time or fixed-term.
With regards to the law surrounding making shielded workers redundant, the Chartered Institute of Personnel and Development (CIPD) advises: ‘If staff have been put on furlough because they have caring responsibilities, or are shielding for health reasons, subsequently pooling and/or selecting these employees for redundancy is likely to constitute indirect discrimination based on sex, disability or age.
‘If the principal reason for furloughing staff is that they have child-care responsibilities, a health condition or are more vulnerable to Covid-19 because of their age, it will be important that the employer ensures that they are not placed at greater risk of redundancy by virtue of the fact that they have been furloughed.’
Are essential workers exempt from redundancy?
Those deemed as key workers – such as people working in the health and education sector, food manufacturing and supply as well as construction – can be made redundant.
Can you get made redundant while you’re off sick?
You can get made redundant while you’re off sick, but once again, only on fair grounds.
On the matter, Pure Employment Law say: ‘The short answer to the question is yes, you can make someone redundant when they are off sick – but as with any dismissal, you are taking a risk, and how big that risk is will depend on the circumstances.
‘For example, if you have a situation where a whole site is closing, that will be very different from a situation where you are having to select staff from a pool in order to determine who will be redundant, or when alternative roles are subject to an interview process.
‘The main thing to bear in mind to avoid an unfair dismissal claim is to act reasonably and follow a fair procedure in the circumstances. If an employee is off sick then your normal procedure may need to be adjusted. So for example, if someone is off sick with a broken leg, you could offer to go and see them at their home to carry out the consultation meetings.’
This advice was echoed by Tom Long of Shakespeare Martineau who told Metro.co.uk: ‘You can be made redundant while you’re off sick, but your employer is still required to consult with you in advance of your potential redundancy.
‘If you are unfit to attend a consultation meeting in person, your employer should consider alternatives, such as a consultation meeting over video or telephone, or allowing you to submit your views in writing.
‘Employers are entitled to use attendance as a reason for redundancy. However, they should be cautious of any absence which is disability-related and should consider this carefully selecting for dismissal. Relying on disability-related absence as a reason for dismissal would be discriminatory.’
Can I get made redundant on maternity leave?
You can also be made redundant while on your maternity leave, but once again, it must be for a legitimate reason and not because of your pregnancy or leave, as this would be discriminatory.
What happens if I am made redundant before I go on maternity leave?
If you think your employer has made you redundant to avoid paying Statutory Maternity Payments (SMP), you may be able to claim the payment directly from HMRC.
Advice from Maternity Action states: ‘If you are made redundant before the 15th week before your expected week of childbirth you will not be able to qualify for SMP.
‘However, if you think that your employer made you redundant in order to avoid paying your SMP (or other types of statutory parental pay) you may be able to claim the pay directly from HMRC.
‘You can contact HMRC Statutory Payments Disputes Team on 0300 322 9422 and ask for a formal decision. You must do this within six months of the first day on which your SMP was due. ‘
You will need to have been employed for at least eight weeks and to show that your employer ended your contract ‘solely or mainly’ to avoid having to pay your SMP.
Will the UK recession lead to more redundancies?
There’s no conclusive answer to that one, but it very well could.
Earlier this week, Rishi Sunak released a statement saying ‘many more’ Brits could lose their jobs in the coming month.
He urged the nation not to be downcast, adding in a statement: ‘We will get through this, and I can assure people that nobody will be left without hope or opportunity.’
During a recession, some companies will be forced to let staff go in a bid to cut costs, while others may freeze employment, meaning there will be fewer vacancies available and increased competition for workers.
What is the minimum redundancy notice period?
If you are made redundant, you must be given a notice period before your employment ends, during which time you are paid.
The duration of your notice period will depend on how long you’ve worked at your company but the statutory redundancy notice periods are as follows:
- At least one week’s notice if employed between one month and 2 years
- One week’s notice for each year if employed between 2 and 12 years
- 12 weeks’ notice if employed for 12 years or more
Your employer can give you ‘payment in lieu of notice’ if it’s in your contract, which means that you’ll get paid instead of working your notice period.
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