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Redundancy and COVID: advice for employees


Author: Bengi Karakus


Redundancy and COVID: advice for employees

Redundancy and COVID: advice for employees

UK redundancies rose to 370,000 in the three-months to October according to the Office for National Statistics. There were 819,000 fewer employees on company payrolls in November than prior to the pandemic in February.

When identifying the declines in payroll by sector, the hospitality industry is the worst affected by coronavirus lockdown restrictions and accounts for 297,000. With businesses, in particular the hospitality industry, facing further restrictions with the Tier systems introduced in the UK, further job losses in the form of redundancies remain probable.

There are signals that redundancies will peak at a higher level than in the 2008 financial crisis as growing numbers of companies are closing their doors and shrinking their workforce in response to the economic shock the Covid-19 outbreak has consequently caused.

The extension of the furlough scheme until March 2021 has provided a support system for businesses to rely upon and retain their workforce. An increase in employment in the health and social care industry with 74,342 jobs presents further considerations for individuals with the possibility of redeployment should individuals be faced with redundancy.

Our Trainee Solicitor Bengi Karakus provides clear information for employees who may be facing redundancy below. The Hatch Brenner Employment team is here to help you during what is often a very stressful and worrying time.

What is redundancy?

Redundancy is a form of dismissal from your job which occurs when employers need to reduce their workforce.

If you are being made redundant, you may be eligible to the following:

  • Redundancy pay
  • A notice period
  • A consultation with your employer
  • The option to move into a different job
  • Time off to find a new job

If you have been made redundant because of the coronavirus pandemic, your employer might be able to re-employ you and pay 80% of your wages under the Coronavirus Job Retention Scheme.

The redundancy process

You must be selected for redundancy in a fair manner. The reasonings for your redundancy may, for example, be based on your level of experience or capability to do your job. You cannot be selected because of your age, gender, disability or if you are pregnant; and doing so may be classed as unfair dismissal.

Employee redundancy rights

Selection for redundancy

Your employer should use a fair and objective way of selecting your redundancy. The common methods that may be used are:

  • Last in; first out (employees with the shortest length of service are selected first for redundancy)
  • Asking for volunteers (self-selection)
  • Disciplinary records
  • Staff appraisal markings, skills, qualifications and experience

Your employer may make you redundant without having to follow a selection process if your job no longer exists. This may be as a result of your employer closing down a whole operation in the company and making all employees working in it redundant. Your employer may offer you a different role if one is available.

Unfair dismissal

You cannot be selected for redundancy for the following reasons:

  • Gender
  • Marital status
  • Sexual orientation
  • Race
  • Disability
  • Religion or belief
  • Age
  • Membership or non-membership of a trade union
  • Health and safety activities
  • Working pattern
  • Maternity leave, paternity leave, birth, or pregnancy
  • Whistleblowing, for example making disclosures about your employer’s wrongdoing
  • Taking part in lawful industrial action lasting 12 weeks or less
  • Doing jury service

Your redundancy may also be an unfair dismissal if your employer has suitable alternative employment and they do not offer it to you.

Notice periods

You must be given a notice period before your employment ends.

The statutory redundancy notice periods are:

  • At least one weeks’ notice if employed between one month and two years
  • One weeks’ notice for each year if employed between two and 12 years
  • 12 weeks’ notice if employed for 12 years or more

You should check your contract of employment as your employer may give you more than the statutory minimum notice period, but they cannot give you less.

Notice pay

As well as Statutory Redundancy Pay, your employer should either:

  • Pay you through your notice period
  • Pay you in lieu of notice depending on your circumstances

Your notice pay is based on the average you earned per week over the 12 weeks before your notice period starts.

Voluntary redundancy

Your employer cannot just offer voluntary redundancy to age groups eligible for an early retirement package as this could amount to unlawful age discrimination.

An early retirement package for certain age groups could be an element of a voluntary redundancy offer open to all employees.

Statutory redundancy pay

You only qualify for Statutory Redundancy Pay if you have worked for your employer for at least two years.

You will get:

  • Half a week’s pay for each full year you were under age 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

Your length of service as an employee is capped at 20 years.

Your weekly pay is the average pay you earned per week over the 12 weeks before the day you got your redundancy notice. If you were paid less than usual because you were ‘on furlough’ because of the coronavirus, your redundancy pay is based on what you would have earned normally.

If you were made redundant on or after 6 April 2020, your weekly pay is capped at £538 and the maximum statutory redundancy pay you can get is £16,140. If you were made redundant before 6 April 2020, these amounts will be lower. Redundancy pay under £30,000 is not taxable.

Exceptions to redundancy pay

You are not entitled to statutory redundancy pay if:

  • Your employer offers to keep you on
  • Your employer offers you suitable alternative work which you refuse without good reason

What to do if you feel your redundancy is unfair

Appealing the decision

You can appeal if you feel that you have been unfairly selected or if you feel your employer did not follow a fair redundancy process.

Appeal to employer

Initially, you should talk to your employer and check if they have an appeals process. You may write to your employer explaining why you think the redundancy is unfair.

You may be able to get assistance from trade unions who may be able to accompany you as a representative at any meetings your employer may set up.

Your employer will need to either accept or reject your appeal in writing.

Appeal accepted

Depending on the stage you are at with your notice period, your job may be offered back to you and your employment contract will be the same as before you were selected for redundancy. Where you have finished your notice period, they can put you back on your previous employment contract. You will need to pay back your redundancy pay where your appeal has been accepted.

Appeal rejected

If you are due redundancy notice and pay, these will continue as planned in the redundancy.

If you still believe your redundancy was unfair, you can make a claim to an Employment Tribunal.

Before making a claim to the employment tribunal, it would be a good idea to explore all options with your employer. You may raise the issue to your employer informally, or as a formal grievance process.

Making a claim to an Employment Tribunal

If you want to make a claim to an Employment Tribunal, you must tell ACAS first.

The early conciliation option is a free service offered by ACAS which can help you and your employer resolve the issue before you need to make a claim.

Employment Tribunal Fee

You do not need to pay a fee to make a claim to an Employment Tribunal.

Time limits

A claim to an Employment Tribunal must usually be made within three months less one day – this is the ‘limitation date.’

If the claim is about redundancy pay or equal pay, the claim must be made within six months.

Early conciliation without an agreement

Early conciliation gives the opportunity for the issue to be resolved between the employee and employer before making a claim.

An early conciliation certificate may be issued in the event that no agreement is reached between the employee and employer. As an employee, you will have a minimum of one month from the date of receipt of the certificate to make a claim to the employment tribunal.

Seek legal advice

As with many legal issues, taking early advice from an expert Solicitor can help to reduce stress and provide clarity regarding your position. Our team of Employment lawyers can help, and offer an initial fixed fee meeting. Contact 01603 660 811 or email info@hatchbrenner.co.uk

If you would like further information about any service, call us on 01603 214220