Recent surveys have highlighted the fact that the number of redundancies within the UK economy is on the increase. Accordingly, what are your redundancy rights should you find yourself in a situation where your employer is making redundancies?
Redundancies Increase
Surveys
Data recently released by the Office for National Statistics (ONS) showed that the number of employers planning to make 20+ redundancies in March 2023 was 90% higher compared to the same period last year. The ONS are able to detect this because where employers are planning to make 20+ redundancies within 90 days, then the employer must complete Form HR1 in order to provide advanced notification of those redundancies.
Moreover, the latest KPMG / REC jobs survey found that the increasing number of redundancies, combined with a decline in permanent job placements, has meant that candidate numbers have increased, thereby making the jobs market more competitive.
Reaction
Commenting upon the findings in terms of the increase in redundancies, the Partner for Skills and Productivity at KPMG UK, Claire Warnes, stated: "The jobs market remains subdued, with the latest survey results showing dampened hiring activity amid ongoing economic concerns. Overall vacancy growth slowed for the third month as businesses delayed hiring decisions, and permanent staff appointments fell for the eighth month in a row as many employers stick to temps. Businesses ready to grow can feel optimistic about an increasing pool of available candidates, which has expanded at the sharpest rate in two-and-a-half years."
What Are Your Redundancy Rights
Should you find yourself in a redundancy situation, what are your redundancy rights?
Selection Process
In terms of consultation, selection, and the issue of whether suitable alternative employment is available to avoid a redundancy situation, please go to the following page.
Notice
In a situation where your employer is making redundancies and you are selected for redundancy, you are entitled to either serve out your notice period (and to be paid through it), or to receive pay in lieu of notice (PILON). Your employer has the option of ending your employment without notice and paying PILON in a redundancy situation, should your contract of employment provide for it. Even if the contract does not provide for it, the employer may still offer to end your employment without notice and pay PILON, but in that situation you are free to either accept or reject.
In terms of notice, you are entitled to the following statutory notice at the very least:-
- 1 week's notice where employed for at least 1 month, but less than 2 years
- 1 week's notice for every complete years service where employed between 2 - 12 years
- 12 weeks notice where employed for 12 years or more
Your contract of employment may provide for a longer notice period than the statutory minimum
Calculating Notice Pay
The calculation of your notice pay is determined by the average amount you earned per week during the 12-week period prior to the commencement of your notice period.
Redundancy Pay
In a redundancy situation, you are entitled to statutory redundancy pay at the very least should you have at least 2 years of continuous service with your present employer. You may be entitled to more than the statutory minimum should your contract of employment provide for it. Nevertheless, you could lose your entitlement to redundancy pay should they have been deemed you to have unreasonably rejected suitable alternative employment.
How Is Statutory Redundancy Pay Calculated?
The statutory cap on a week's pay increased from £571.00 to £643.00 on the 6th April 2023 for the purposes of calculating statutory redundancy pay, and the maximum that can now be paid in terms of statutory redundancy pay is £19,290.00 (i.e. 20 x £643.00 x 1.5). Hence, from the 6th April 2023, the amount of statutory redundancy pay an employee is entitled to is the number of weeks which can be taken into account multiplied by the lower of either their average weekly wage or £643.00.
The number of weeks which can be taken into consideration depends on how long the employee has been continuously employed by their employer and how their years of continuous service relate to certain age bands. For each complete year of continuous service under the age of 22, they will receive half a week’s pay. For each complete year of continuous service between the ages of 22 and 40, they will receive one week’s pay. For each complete year of continuous service between the ages of 41 and above, they will receive 1½ weeks’ pay. The maximum number of years which can be taken into account is 20.
