The options if your boss says the dreaded R-word
Joanna Adams, HR consultant with law firm Darwin Gray, provides a guide to redundancy
No-one wants to mention it, even less admit that they are blighted by it. The “R-word”. More than 400,000 people were made redundant in 2017 in the UK and, with a workforce of around 31 million, this figure equated to around one in 75 of the workforce in a single year.
The news is awash with longestablished names collapsing, such as Toys R Us, Monarch Airlines and Carillion. We hear daily of highstreet chains making deep cuts in their staffing requirements as our spending habits change.
If you are faced with losing your job, it’s important to ensure you understand your rights, recognise when your employer is treating you fairly (or not as the case may be) and, when the day comes, be in a better place to move on.
So what should you expect if your manager utters such ominous phrases as “it’s a tough trading climate”, “there’s been a downturn in business” or “we need to make some changes”?
HOW YOUR EMPLOYER HANDLES THE SITUATION
Consultation and redundancy go hand in hand – or should do. Consultation is the breathing space between being told your job is at risk and confirmation that it is being axed.
During this period employers and those at risk are meant to look for ways to avoid redundancies taking place. It buys some time.
For companies with over 20 staff at risk, it can typically be anything between 30-45 days in duration. For larger redundancy rounds, consultation can last for 90 days.
Be aware that for smaller numbers of “at-risk staff”, the breathing space can be perilously short... though it still has to be “meaningful”.
In reality, the period of time between being warned that your job is at risk and this being confirmed can be as dauntingly brief as one week.
SOME EMPLOYERS MAY ASK FOR VOLUNTEERS
A more generous package may be offered to staff who volunteer to go. This is done tactically to avoid the disruption of compulsory redundancies.
However, employers risk losing their most agile workers and will think twice before offering such packages.
Still, if a good package is on the table and you have good prospects of employment elsewhere, this could be a win-win for you.
WILL YOU BE EXPECTED TO WORK DURING THE REDUNDANCY CONSULTATION?
Typically, you will be expected to work but if there is literally no work to do and your role is no more, then you may be placed on what is commonly known as “gardening leave”.
Be aware that if there is continuing work, being placed on gardening leave suggests that the consultation period is a fait accompli – that the decision has already been made, and so the process being followed by your employer could be a sham.
If there is such unfairness in the process, you may well have a right to claim that you have been unfairly dismissed.
WHAT CAN YOU EXPECT TO BE PAID?
Go back to your contract or your company handbook to see if it makes mention of redundancy pay or terms. If these documents are silent, you will at least be entitled to statutory redundancy pay as long as you have worked for your employer for more than two years.
For statutory redundancy, earnings are capped at £508 per week, so the maximum payment is now £15,240. A failsafe way to calculate your entitlement is by using the gov. uk redundancy payment calculator at www.gov.uk. The good news is that your redundancy pay is tax-free up to £30,000.
CAN YOU EXPECT ANYTHING ELSE?
When you are given notice of redundancy, you will be entitled to your notice period at your normal salary rate. The statutory notice period when you have worked for over two years is a week for every year worked, up to a maximum of 12 weeks.
You will either be required to work or you may receive payment in lieu of notice (commonly referred to as PILON). Make sure to check your contract regarding any reference to PILONs. They used to be a neat way of receiving a further tax-free sum to boost your redundancy pot – but as of this new financial year, PILONs will be taxed as earnings.
Any accrued but untaken annual leave at the time of your dismissal for redundancy will also be paid in your final pay.
WHAT IF YOUR EMPLOYER IS INSOLVENT?
A claim for statutory redundancy, statutory notice and unpaid holiday for up to six weeks can be made to the National Insurance Fund in such cases.
WHAT IF YOU FEEL YOU’VE BEEN UNFAIRLY TREATED?
You should first try talking informally with your employer. If you can’t reach an agreement or still feel you’ve been unfairly treated, you should raise a formal grievance. Go back to your employment handbook and follow your company procedure for doing this.
Do follow this process to its conclusion and if nothing positive comes from it, you may have redress through the Employment Tribunal.
The Advisory, Conciliation and Arbitration Service (Acas) offers free advice on employment rights, and your local Citizens Advice Bureau (CAB) can also provide free and impartial advice.
FINDING WORK
Your employer may have arranged for you to have retraining or counselling to help you find your next role. Your local Jobcentre Plus can also offer you support and advice.