Top tips: how to deal with redundancy
- First of all, get your boss to explain to you exactly why you are redundant. Make sure to write down all the details as you may not remember them later. Don’t agree to any terms before you have had time to think them through. Employers should consult on redundancies beforehand so you can improve the package on offer or suggest ways your job could be saved.
- You need to find out what the redundancy package on offer is, including how this applies to your pension rights and whether holiday leave still owed has been included. Also make sure you get your P45.
- Consult your union representative if you have one or liaise with your company’s HR department.
- You are likely to be offered one of three options: to work your notice, to go on “gardening leave” [basically to go on leave for the duration of your notice period] or to leave immediately but be paid to cover your notice period.
- If you have worked for your company for over two years, you will be entitled to redundancy pay. Redundancy terms vary per organisation, but the legal minimum is:
- Half a week's pay for each complete year of service below the age of 22
- One week's pay for each year between 22 and 40
- 1½ weeks' pay for each year above the age of 41
Statutory redundancy pay is capped at £430 a week. The first £30,000 is tax free, although payment in lieu of notice or holiday periods is not tax free.
- You may be offered a lump sum. This could be a good deal, but it is well worth checking it out first with an employment lawyer or your union as you may be able to secure a better deal.
- Once you have been made redundant, sign up for Jobseeker’s Allowance and inform your mortgage company, bank and credit card companies that you are unemployed as they may be able to alter your payment plans.