Legal Brief

What you may be entitled to when made redundant

By Alan Lewis

- Last updated on GMT

What am I entitled to if made redundant? Credit: Getty/WillSelarep
What am I entitled to if made redundant? Credit: Getty/WillSelarep

Related tags Regulation Training & recruitment

Alan Lewis, partner and employment solicitor at Pearson Solicitors and Financial Advisers, outlines your rights as an employee and what business owners must do when it comes to redundancies.

It’s always sad when a company closes and staff lose their jobs. However, it’s a fact that many businesses are struggling to remain profitable in an often challenging environment, more so in the food industry than any other.

However, business owners have a legal duty to follow the correct procedures and employees the right to be treated fairly throughout any redundancy process.

What are you entitled to?

If made redundant, you’ll usually be entitled to statutory redundancy pay, and you may even get enhanced redundancy. During your redundancy notice period, you can also take time off to seek alternative employment or training.

An employee who has been working for the same employee for two or more years can receive:

  • Half a week’s pay for each full year if you are aged under 22
  • One week’s pay for each full year if you’re aged 22 or older but under 41
  • One and a half week’s pay for each full year you were 41 or older

However, in all cases, the length of service is capped at 20 years and weekly pay is capped at £643 on or after 6 April 2023. The maximum statutory redundancy pay you can get is £19,290, but if you were made redundant before 6 April 2023, these amounts will be lower.

Your employer must follow a fair consultation process as part of the redundancy process. Consideration should always be given to establishing a pool for redundancy selection and deciding upon fair and objective selection criteria. Such criteria must then be fairly applied, and consideration given to alternative employment if any vacancies exist. If an employer does not follow these guidelines, you could take your employer to an employment tribunal for unfair dismissal (provided you have been employed for two years or more).

It’s always advisable to check your employment contract as there may be a payment in lieu of notice clause and enhanced redundancy packages available. An employment solicitor can help out in many cases.

A termination payment should also include accrued holiday pay, unpaid wages and company benefits, i.e. bonuses.

If twenty or more employees are being made redundant at the same establishment, your employer must also follow a collective consultation procedure at least 30 days prior to any dismissal taking effect. This involves consulting with a recognised trade union (if any) or employee representatives. You may be entitled to a Protective Award if your employer fails to consult. Many employees are unaware of this potential claim, which can be very valuable.

We are seeing companies across all sectors struggling and are currently supporting hundreds of employees made redundant by SMEs all over the UK. The food industry has been particularly hit by a double whammy of the pandemic and cost of living crisis, and this has a significant impact on their workforce, but if employees are told they are losing their jobs with immediate effect, they can make a claim.

Provided 20 or more employees are made redundant at the same establishment (which usually means a head office, warehouse or individual store), all affected employees can pursue a claim for a protective award, regardless of how long the business has employed them.

The Protective Claim award is also guaranteed. If your employer cannot pay your award, then the Government steps in and guarantees eight weeks' pay, capped at £643 per week, less any arrears of pay you may have received from the Redundancy Payments Office, so employees really have nothing to lose.

What is a Protective Award Claim?

Essentially, it is an award of compensation of up to 90 days’ gross pay awarded by an Employment Tribunal for employers failing to collectively consult with staff dismissed on the grounds of redundancy.

This applies to dismissing twenty or more employees within a 90-day period from the same establishment.

We’re acting for some who have simply been dismissed by text and told not to come into work the next day.

It is important to note that, unlike redundancy payments, you do not need to have been employed for two years to make a Protective Award claim.

Losing your job is a stressful time; money issues become paramount, and the legalities of a claim can seem off-putting, but staff do need to take action promptly.

There is a time limit of three months less one day for bringing a Protective Award claim, and this limitation period commences on the date the last person who was dismissed by reason of redundancy within the 90-day period had their contract of employment terminated.

To obtain a Protective Award, employees must commence legal proceedings in the Employment Tribunal, and so obtaining legal advice is recommended.

For example, the precise legal basis of the claim needs to be set out in a document lodged at the Employment Tribunal called an ET1. Various procedural steps need to be complied with. Responses may be filed to the claim and a hearing may be fixed before an Employment Judge. Most employees do not feel confident dealing with such a process without legal support and assistance.

You should check whether there was a Union that was recognised by the company for collective bargaining purposes and redundancy consultation. If they were, then only the Union can bring a claim on behalf of all those employees who formed part of the collective bargaining unit, irrespective of whether they were members of the Union.

If the Union was not recognised, then either elected/appointed employee representatives (if any) or individuals must bring claims themselves, although the Union should assist you in such claims if you were a member.

Redundancy is a stressful period, both for employers and their staff, but it pays in the long term to make sure you’re getting what you deserve.

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