The following is some basic guidance and rules for redundancy.
Statutory redundancy is only entitled to people who are classified as “employees,” not “workers” or “self-employed.” Many people on casual contracts or ‘zero-hours’ are formally “workers.” If you are not sure what your employment status is, read the guidelines from ACAS.
This section only applies to people with 2 or more years service with the employer.
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
- Plus any extra redundancy pay that is outlined in your contract
- Length of service is capped at 20 years.
From the 6 April 2020, your weekly pay is capped at £538 and the maximum statutory redundancy pay you can get is £16,140. Redundancy pay (including any severance pay) under £30,000 is not taxable.
Exemptions 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
- You have worked for less than 2 years with this employer
If you have been laid off for more than 4 weeks in a row or more than 6 weeks in a 13 week period, you can write to your employer and tell them you wish to claim redundancy pay.
The following applies to everyone being made redundant.
You must be selected for redundancy in a fair way, for example because of your level of experience or capability to do the job.
You cannot be selected because of age, gender, or if you’re disabled or pregnant. If you are, this could be classed as an unfair dismissal.
You must be given a notice period before your employment ends.
The statutory redundancy notice periods are:
- At least 1 week’s notice if employed between 1 month and 2 years
- 1 week’s notice for each year if employed between 2 and 12 years
- 12 weeks’ notice if employed for 12 years or more
Check your contract. Your employer may give you more than the statutory minimum, but they cannot give you less.
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
You’re entitled to a consultation with your employer, this involves speaking to them about:
- Why you are being made redundant
- Any alternatives to redundancy
If your employer is making up to 19 redundancies, there are no rules about how they should carry out the consultation. If they are making 20 or more redundancies at the same time, the collective redundancy rules apply.
You can make a claim to an employment tribunal if your employer does not consult properly, for example if they start late, or do not consult at all.
Collective redundancy rules
If your employer is making 20 or more employees redundant at the same time, the consultation should take place between your employer and a representative (rep).
This will either be:
- A trade union rep (if you’re represented by a trade union)
- An elected employee rep (if you’re not represented by a trade union, or if your employer does not recognise your trade union)
Collective consultations must cover:
- Ways to avoid redundancies
- The reasons for redundancies
- How to keep the number of dismissals to a minimum
- How to limit the effects for employees involved, for example by offering retraining
Your employer must also meet certain legal requirements for collective consultations.
Length of consultation
There’s no time limit for how long the period of consultation should be, but the minimum is:
20 to 99 redundancies – the consultation must start at least 30 days before any dismissals take effect
100 or more redundancies – the consultation must start at least 45 days before any dismissals take effect
Electing employee reps
If you’re an employee affected by the proposed redundancies you can:
- Stand for election as an employee rep
- Vote for other reps
Suitable alternative employment
Your employer might offer you ‘suitable alternative employment’ within your organisation or an associated company.
Whether a job is suitable depends on:
- How similar the work is to your current job
- The terms of the job being offered
- Your skills, abilities and circumstances in relation to the job
- The pay (including benefits), status, hours and location
Your redundancy could be an unfair dismissal if your employer has suitable alternative employment and they do not offer it to you.
Refusing an offer
You may lose your right to statutory redundancy pay if you unreasonably turn down suitable alternative employment.
You can make a claim to an employment tribunal if you think the job you’ve been offered is not suitable.
You have the right to a 4 week trial period for any alternative employment you’re offered.
The 4 week period could be extended if you need training. Any extension must be agreed in writing before the trial period starts.
Tell your employer during the trial period if you decide the new job is not suitable. This will not affect your employment rights, including your right to statutory redundancy pay.
You’ll lose your right to claim statutory redundancy pay if you do not give notice within the 4 week trial period.
Time off for job hunting
If you’ve been continuously employed for 2 years by the date your notice period ends, you’re allowed a reasonable amount of time off to:
- Look for another job
- Arrange training to help you find another job
How long you can take will depend on your circumstances.
No matter how much time you take off to look for another job, the most your employer has to pay you is 40% of one week’s pay.
Help moving forward
This section is specifically for fellow workers in Cymru/Wales. Contact your local branch to ask if there are similar programs in your area.
Careers Wales can help with a number of things such as CV writing, interview techniques, job hunting and can refer you to the ReAct team which has funding to give you £1500.00 for suitable retraining to help you get a job or can give up to £3000 to a new employer to take you on and cover up to £1000 of the employers costs to train you.
Who can get this help?
- People who have become unemployed in the last 3 months as a result of redundancy,
- People who are currently unemployed, and who have not been in continuous employment for 6 weeks or more since being made redundant
- People who are currently under notice of redundancy
- People who have not undertaken any publicly funded training since being made redundant, including the work-based learning suite of programmes
What is available?
- 100% of training costs to acquire new skills (up to a maximum of £1,500)
- Help towards the cost of travelling to training courses
- Overnight accommodation costs, where appropriate
- A contribution towards childcare costs whilst training (subject to limits and conditions)
- Help with the cost of special equipment to remove barriers to training
- Up to £3000 for an employer taking you on
- Up to £1000 towards the cost of training – for the employer
How much they will get depends on their circumstances and conditions.
If you wish to apply for the ReAct Vocational Training grant, you first need to see an Adult Guidance Adviser at your local Careers Wales office. Contact us on 0800 028 4844 to make an appointment.
Your prospective employer will need to contact Welsh Government on 03000 255 888 if they wish to apply for Employer Recruitment and Training Support.