Redundancy: your rights

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1. Overview

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

If you’re being made redundant, you might be eligible for certain things, including:

• 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

You also have specific rights if your employer is insolvent.

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.

Get advice

You can get advice on redundancy from Acas (Advisory, Conciliation and Arbitration Service) or Citizens Advice.

2. Being selected for redundancy

Your employer should use a fair and objective way of selecting you for redundancy.

Commonly used methods are:

• last in, first out (employees with the shortest length of service are selected first)
• asking for volunteers (self-selection)
• disciplinary records
• staff appraisal markings, skills, qualifications and experience

Your employer can make you redundant without having to follow a selection process if your job no longer exists, for example if:

• your employer is closing down a whole operation in a company and making all the employees working in it redundant
• you’re the only employee in your part of the organisation

Your employer may offer you a different role if one is available.

If your employer uses ‘last in, first out’, make sure it’s not discrimination, for example if it means only young people are made redundant.

Reapplying for your own job

You might be asked to reapply for your own job, which could help your employer decide who to select.

If you do not apply or you’re unsuccessful in your application, you’ll still have a job until your employer makes you redundant.

Unfair selection

You cannot be selected for the following reasons - your redundancy would be classed as an unfair dismissal:

• sex
• gender reassignment
• marital status
• sexual orientation
• race
• disability
• religion or belief
• age
• your membership or non-membership of a trade union
• health and safety activities
• working pattern, for example part-time or fixed-term employees
• maternity leave, birth or pregnancy
• paternity leave, parental or dependants leave
• you’re exercising your statutory rights
• whistleblowing, for example making disclosures about your employer’s wrongdoing
• taking part in lawful industrial action lasting 12 weeks or less
• taking action on health and safety grounds
• doing jury service
• you’re the trustee of a company pension scheme

Appealing the decision

You can appeal if you feel that you’ve been unfairly selected. Write to your employer explaining the reasons.

You may be able to make a claim to an employment tribunal for unfair dismissal.

Voluntary redundancy

It’s up to your employer whether they actually select you if you volunteer for redundancy.

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

However, an early retirement package (for certain age groups) could be one element of a voluntary redundancy offer open to all employees.

Apprentices

Talk to your manager and training provider if you’re an apprentice and you’re worried about being made redundant.

Your training provider or the Apprenticeship service might be able to help you find another employer to help you complete your apprenticeship.

3. Statutory redundancy pay

You’ll normally be entitled to statutory redundancy pay if you’re an employee and you’ve been working for your current employer for 2 years or more.

You’ll get:

• 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

Length of service is capped at 20 years.

Your weekly pay is the average 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 coronavirus, your statutory redundancy pay is based on what you would have earned normally.

If you were made redundant on or after 6 April 2023, your weekly pay is capped at £643 and the maximum statutory redundancy pay you can get is £19,290. If you were made redundant before 6 April 2023, these amounts will be lower.

Calculate your redundancy pay.

Exceptions

You’re 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

Being dismissed for misconduct does not count as redundancy, so you would not get statutory redundancy pay if this happened.

You’re not entitled to statutory redundancy pay if you fall into one or more of the following categories:

• former registered dock workers (covered by other arrangements) and share fishermen
• crown servants, members of the armed forces or police services
• apprentices who are not employees at the end of their training
• a domestic servant who is a member of the employer’s immediate family

Short-term and temporary lay-offs

You can claim statutory redundancy pay if you’re eligible and you’ve been temporarily laid off (without pay or less than half a week’s pay) for either:

• more than 4 weeks in a row
• more than 6 non-consecutive weeks in a 13 week period

Write to your employer telling them you intend to claim statutory redundancy pay. This must be done within 4 weeks of your last non-working day in the 4 or 6 week period.

If your employer does not reject your claim within 7 days of receiving it, write to your employer again giving them your notice.

Your claim could be rejected if your normal work is likely to start within 4 weeks and continue for at least 13 weeks.

4. Tax and National Insurance

If you’re made redundant, you may get a ‘termination payment’. This could include:

• statutory redundancy pay
• holiday pay
• unpaid wages
• company benefits, for example bonuses

Statutory redundancy pay under £30,000 is not taxable.

What you’ll pay tax and National Insurance on depends on what’s included in your termination payment.

5. Notice periods

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

The statutory redundancy notice periods are:

• at least one week’s notice if employed between one month and 2 years
• one 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.

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.

If you were paid less than usual because you were ‘on furlough’ because of coronavirus, your notice pay is based on what you would have earned normally.

Payment in lieu of notice

Your employment can be ended without notice if ‘payment in lieu of notice’ is included in your contract. Your employer will pay you instead of giving you a notice period.

You get all of the basic pay you would’ve received during the notice period. You may get extras such as pension contributions or private health care insurance if they’re in your contract.

Your employer may still offer you payment in lieu of notice, even if your contract does not mention it. If you accept, you should receive full pay and any extras that are in your contract.

6. Consultation

You’re entitled to a consultation with your employer if you’re being made redundant. This involves speaking to them about:

• why you’re 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’re 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

Fixed-term contract employees

Your employer does not need to include you in collective consultation if you’re employed under a fixed-term contract, except if they’re ending your contract early because of redundancy.

7. Suitable alternative employment

Your employer might offer you ‘suitable alternative employment’ within your organisation or an associated company.

They must offer you a suitable alternative job (if one is available) if you’re on, or have recently taken, maternity leave or other types of parental leave.

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.

Trial periods

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.

Example

You work 5 days a week and you take 4 days off in total during the whole notice period - your employer only has to pay you for the first 2 days.

8. Get help finding a new job

You can get help from the Jobcentre Plus Rapid Response Service to:

• write CVs and find jobs
• find information on benefits
• find the right training and learn new skills
• organise work trials (if you’re eligible)
• get any extra help at work if you’re disabled, for example Access to Work

You may also be able to get help with costs, such as:

• travel to work expenses
• childcare
• tools or equipment
• vocational training - you must be in your notice period to be considered

There’s a different service in Scotland and a different service in Wales.

Get in touch

You can contact the Rapid Response Service:

• if you suspect you’re going to be made redundant
• during your notice period
• up to 13 weeks after you’ve been made redundant

Rapid Response Service
rrs.enquiries@dwp.gov.uk

Further information and support

You can read more about finding a job, how your pension might be affected, and what benefits you could get.