Redundancy can come as a shock. Even though it’s about the job, not the person doing it, it can be hard not to take personally.
Understanding your rights can help you navigate the redundancy process and get everything you’re entitled to. This includes different types of pay, how the redundancy process should work, and what happens if your employer changes their mind.
You may be entitled to three types of redundancy pay:
- Statutory redundancy pay. This is the minimum your employer must pay you. It's determined based on your age and length of service.
- Contractual redundancy pay. Whether or not you receive this depends on what’s in your employment contract. It could mean you still get something, even if you don’t qualify for statutory pay.
- Statutory notice pay. Your employer must give, and pay you for, a statutory notice period determined by your length of service. If it’s agreed you’ll leave before this period is up, they must pay you in lieu of notice (PILON).
We’ve written a separate blog post covering the different types of redundancy pay in more detail.
You must be selected for redundancy using a fair, objective method
Your employer may select people for redundancy by asking for volunteers or selecting employees with the shortest length of service first. These are both fair and objective.
You cannot be chosen based on things like your race, religion, or gender. If you think you’ve been selected for a reason like this, then you may have been dismissed unfairly. In this situation, getting independent advice can help you understand what your options are.
As part of the selection process, you may be asked to reapply for your job. If you don't apply, or if you’re unsuccessful, you’ll still have a job until your redundancy takes effect.
In some situations, no selection process is needed. For example, if you're the only person doing a role that has been made redundant.
Your employer must have a consultation discussion with you
When you’re made redundant, you have the right to a consultation with your employer. This involves talking through the reasons for redundancy and options that could keep you employed by them.
If your employer is making 20 or more people redundant at the same time, the consultation must follow a set process. This is called the collective redundancy rules. They cover things like:
- How long the consultation must last
- What discussions should cover
- Who should be involved in discussions to represent both your employer and the affected employees
Your employer must offer suitable alternative employment if they can
If your employer is hiring elsewhere in the company and this job would be suitable for you, they must let you know. Whether a job is suitable depends on how it compares to your current role. In particular:
- The day-to-day work
- The terms of the job
- How your skills, abilities and experience relate to the job
- The pay (including benefits)
- The hours and location
- How senior the role is
If you take an offer of alternative employment, you have the right to a four-week trial. If you realise the new job isn’t suitable, you must tell your employer during the trial.
If you turn down a suitable role without a good reason, or don't give notice that an alternative is unsuitable during the trial period, you may lose your right to statutory redundancy pay.
Your employer can change their mind
If your employer decides not to make you redundant after all, your rights depend on when in the process this happens.
If you’re “at risk” of redundancy but your redundancy is not yet confirmed, you’ll simply continue in your role.
Once you’ve received your redundancy notice, your employer can’t change their mind without your agreement. You don’t have to stay.
If you stay, your notice period will be cancelled and you won’t get any redundancy pay. If you leave, then this will still be at the end of your agreed notice period. However, you may lose your redundancy pay if the job on offer is suitable alternative employment. Be sure to check the offer terms carefully before deciding what to do.
Protection during pregnancy and parental leave
The Protection from Redundancy (Pregnancy and Family Leave) Act 2023 enables the Government to enhance legal protection against redundancy for pregnant employees and new working parents. However, further legislation is needed to implement any additional protection. This currently has no timescale.
In the meantime, the Employment Rights Act 1996 already requires employers to:
- Allow you to return to the same (or a similar) role after maternity, paternity or shared parental leave
- Avoid redundancy where possible
- Offer suitable alternative employment to employees on maternity, adoption or shared parental leave
It’s classed as unfair dismissal to make you redundant because you’re pregnant or on a type of parental leave. If you think this has happened to you, you may want to seek independent advice. You could be entitled to compensation.
Help is available if you need it
If you need advice about your own redundancy situation, you can speak to these organisations for free:
You can also get help with your search for a new job from the JobCentre Plus Rapid Response Service.
Disclaimer: We make every effort to ensure that content is correct at the time of publication. Please note that information published on this website does not constitute financial advice, and we aren’t responsible for the content of any external sites.