Facing Redundancy: Here’s What You Need to Know

So the time has come: your role is in danger of being made redundant. You had an idea that bad news was on the way. Perhaps you’ve seen colleagues leave, or maybe you’ve heard rumours. Maybe the company is struggling and needs to shrink its workforce, or maybe it’s going in a whole new direction – and wants new staff to steer the ship. Either way, your job could be one of the next to go – so what happens now?

Businessman fired

The start

From the start of the process, know that you should be eligible for redundancy pay and a notice period. Providing you have worked at the company for longer that two years, you will probably be entitled to a minimum statutory redundancy payment that is based upon your wage, and your length of service (in full years). The payment is either half a week’s pay for every complete year (if you’re under 22), one week’s pay for each full year between 22 and 41, and one-and-a-half week’s pay for every year above the age of 41.

So even before the redundancy is confirmed you can calculate what you might receive – and this might influence your upcoming decisions. Bear in mind that if you are lucky enough to receive a redundancy payment above £30,000 you won’t have to pay tax.


The reason this could be important is that all employees are entitled to take part in the consultation process regarding their role. If this procedure is not followed properly a redundancy could be deemed unfair, and the employer could be taken to tribunal.

There is a difference between voluntary redundancy where employees are asked if they would like to take redundancy such as this example, and compulsory redundancy. A selection process could take place for either one of these criteria and employers must make a fair, non-discriminatory decision based on work record, attendance and workplace behaviour, among other things. Reasons such as family circumstances, gender, or participation in a trade union are unfair. Sometimes several people may apply for just a few redundancies, which will leave the employer with a strange decision to make.

Consulting with benefit consultant


As well as a statutory payment, you also have a notice period; a time period which you are given in order to find new work when you leave. Again, this depends on how long you have worked with your current employers, but it roughly translates to a week per year at the company. (unless you’ve been there less than two years). You will be paid through this notice period, and your employer must give you support when you are looking for new work during this period.


When you finally come to leave your job behind, you might have to sign a legally binding agreement which might include confidentiality/gagging clauses regarding your current employer, and an agreed reference. Also included will be details on the claim settlement, and the related payments and tax issues.


If you’ve been at a job for decades and can’t imagine doing anything else, then redundancy could be a terrible blow. In the 21st Century more jobs are becoming under risk of redundancy as companies streamline, or even replace people altogether. So it’s vital that you prepare yourself for the process and start hunting for a replacement job, should the worst become reality. You might discover that moving on from work, even if it wasn’t initially your decision, could be the best move you ever make.