Redundancy factfile

When times are tough, many employers weather the storm by ‘restructuring’ or shutting up shop altogether. Dealing with redundancy is a fact of life for many families, so if you are worried about your job, or have already been made redundant, here are a few things to consider:

So what does redundancy mean?

Your position may be made redundant if your workplace is closing or ‘downsizing’. Even though we talk about ‘being made redundant’ it is your job that is redundant, not you: redundancy is not the same as dismissal.

What are my rights?

If your job is made redundant:

You are legally entitled to be told about your redundancy in advance and why it’s happening. You should also be given the chance to discuss alternatives to the redundancy with your employer. ‘If you are going to be made redundant from your job, you should be treated fairly by your employer and there are certain steps your employer is expected to follow, ‘ says Mike Hoban, communications director at public services information site, Directgov.

What about money?

‘If you have two years’ continuous service with the company, you have the right to a redundancy payment and notice pay, and wherever possible your employer should try to offer you a suitable alternative job,’ Hoban adds.

If you have income protection insurance, contact your insurer straightaway so they can start processing your claim.

If you are struggling, find out if there are any benefits or tax credits you can claim.

I’m pregnant – can they make me redundant?

For parents and mums-to-be, employers have to tread extra carefully.

  • Your employer cannot fairly make your redundant for any reason connected with maternity leave, pregnancy or birth or any other family leave such as paternity, parental or dependants’ leave.
  • Your employer can only make you redundant while you are on maternity leave if they can justify the choice– for example if they close the section of the business you normally work in and make other employees in that section redundant.
  • However, if your employer needed to make staff cuts across the company, they cannot make you redundant because you are on or are about to go on maternity leave.
  • If you are made redundant while on maternity leave, then you have special rights. Even if you do not have the normal two years service, you have the right to be offered any suitable alternative job in the company.

What do I do now?

If your job has been made redundant, you have been consulted in the proper way and received the pay you are entitled to, Chris Tapp, director of money education charity Credit Action, suggests you take stock.

‘Above all, don’t panic,’ he says. ‘Weigh up the opportunities out there for you before you act. As an increasing number of people are out of work, make yourself stand out from the crowd when going for a new job, maybe by creating an attractive cv or retraining to broaden your skills.’

  • ‘Start by creating a budget – taking a significant drop in income will obviously put pressure on your finances and you need to stretch them as far as you can,’ adds Tapp. See our tips on budgeting for a baby.
  • ‘Check whether you are receiving all you are entitled to from the government,’ Tapp continues. ‘
  • If you are worried about your finances, contact a free and independent money or debt advice organisation as soon as possible,’ Tapp concludes. See our section on coping with financial difficulties.
  • Take a deep breath, and clear your head so you can focus on what you want from your next job. Once the dust has settled you might begin to see it as an opportunity to do something bigger and better.
  • Talk to a careers advisor, and sign up with recruitment agencies and jobs boards.
  • For help in writing your CV click here.
  • Always wanted to set up your own business but don’t know where to start? Here’s what you need to know.

Where to go for redundancy advice

For more about what to do if you are made redundant go to Directgov, Credit Action or Citizens Advice. For advice on looking for work and entitlement to benefits, go to Jobcentre Plus. For information about tax credits go to Tax Credits Online.

IMPORTANT NOTE: this feature is for guidance only and is not intended to be a substitute for professional financial advice.