Back on January 1, as we said goodbye to 2019, little did we know that 2020 would become one of the most disruptive and unpredictable years in living memory.
And as the October 31 deadline for the end of the furlough scheme approaches, many are understandably worried about the prospect of redundancies and where they stand with furlough redundancy pay.
But, as with anything, knowledge is power. Perhaps now, more than ever before, for employees and employers alike, knowledge on redundancies and employment rights could be the key to staying on the right side of the law.
What if I am made redundant?
While you may see being made redundant as a form of dismissal, this is far from the case.
Redundancies are made when a company needs to reduce their staff numbers, rather than any aspect of misconduct on an employee’s behalf. If an employee is to be fired, different rules apply.
If you are being made redundant, there are a number of things you may be entitled to. These include:
- redundancy pay – subject to length of service with the company;
- a notice period or payment in lieu of notice;
- the right to consultation on any alternatives to redundancy including any suitable alternative jobs; and
- time off to find a new job (subject to length of service).
What Redundancy Pay will I get?
If you have worked for your employer for two years or more, you will likely be entitled to some redundancy pay (dependent upon the type of contract you are engaged under). Age and length of service will determine the amount of redundancy pay you are entitled to.
This is calculated as:
- 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 a maximum of 20 years, while ‘weekly pay’ is determined by the average earnings per week over the 12 weeks prior to the day you receive your redundancy notice.
What redundancy pay will I receive if made redundant due to coronavirus?
If you were on furlough while made redundant and were receiving less than you usually would if at work your employer may be making illegal deductions from your wage as redundancy pay is worked out from your usual full wage.
The date you were made redundant will affect the amount of redundancy pay you are entitled to as statutory changes came into effect on 6 April 2020. If made redundant after April 6 2020, the amount of weekly pay is capped at £538. Maximum statutory redundancy pay is also capped at £16,140.
These figures will be less if you made redundant prior to this date.
When am I not entitled to any redundancy pay?
There are exceptions however.
If your employee offers you suitable alternative employment and you refuse this, or determines during the redundancy process that your job is no longer at risk, but you still decide to leave, you could waive your entitlement to any statutory redundancy pay.
If you have been offered a new role there are a few things to consider first though.