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Last Updated: Friday, 2 June 2006, 13:35 GMT 14:35 UK
Redundancy Q&A
Greg Paine of Armchair Advice
Greg Paine of Armchair Advice
Greg Paine from Armchair Advice answers all your redundancy questions.

I was recently made redundant with no notice given. Am I entitled to any compensation in lieu of notice?

An employee who is being dismissed by reason of redundancy is entitled to the same notice period as that to which he would be entitled if being dismissed for any other reason. It is therefore unusual for redundancies to be made with no notice given. I don't know the specific circumstances here, for example has the employer gone into administration, but wonder if any other employees were also made redundant and if so how many?

If more than 20 employees are to be dismissed because of redundancy, the law states that there should be a period of collective consultation between the employer and appropriate employee representatives and that this period of consultation should begin in 'good time'. The legislation states that this should be at least 30 days before the first dismissals take place if 20-99 employees are to be dismissed.

If less than 20 employees are to be dismissed because of redundancy an employer should consult with each affected employee before dismissal notices are handed out, so that there is a chance of real consultation and time for the employee to respond.

The statutory notice period is one week for every complete year worked, however your contract may state that you should be given a longer notice period such as one or three months. If this condition has not been fulfilled then you are entitled to a payment in lieu of notice or it may be considered an unfair dismissal.

From what you say it suggests that the correct procedure has not been followed. You should seek professional legal advice with regard to the specifics of your case. You can find specialist employment law solicitors in your local area on our website www.armchairadvice.co.uk

If you have been employed with the company for less than two years are you entitled to anything?

This depends on whether you were dismissed by reason of redundancy or for any other reason.

If you were dismissed for any reason other than gross misconduct and had been in continuous employment for more than one month but less than two years, then you are entitled to one week's notice or payment in lieu of notice - unless your contract specifies a longer period.

Sadly with the law as it stands at present, you must have at least two years of continuous service with an employer before you are entitled to a redundancy payment.

When are you actually 'redundant'? I was due to be made redundant on the 28th April and received a letter that stated 'Unfortunately, as we discussed, no suitable position has been identified.'

However I had applied for two internal positions and it was said that if on 28th April I was still in the process that I would not be redundant, but on 'gardening leave'.

By the 28th April I was still waiting for a reply on one of the positions and thus assumed that I was going on 'gardening leave' until a definitive answer was received.

But in May I received a 'final' payslip with redundancy pay and a P45 effective from 28th April. Surely my redundancy should have started once all positions within the company had been exhausted, when I was unsuccessful on the last of these positions?

Your employer stated that no 'suitable' alternative position had been identified. The fact that on your own initiative you applied for alternative positions does not necessarily mean that they should be considered 'suitable' - and unfortunately the fact that you were unsuccessful in your job applications would seem to endorse the fact that they were not.

If you had been successful in your job application and your new job had started within four weeks then you would not have been entitled to a redundancy payment, hence the statement from your employer regarding 'gardening leave'. Since you were not successful in your application the original date of the redundancy would stand.

With all the looming NHS redundancies and the ongoing issues with public sector pensions/ final salary schemes can you advise whether pension rights are protected if you are made redundant?

Your pension should be paid up until the point of your departure. From this point all payments will cease and you will have choices regarding what to do with this pension when you gain subsequent employment.

If you are in a final salary pension scheme and get new employment you should almost certainly leave your pension in the scheme when you leave. It is a more difficult decision if you have a money-purchase company pension scheme. It may be worthwhile pulling together all your pensions into a single scheme offered by a new employer. Given the complexities involved it is important to have your pension valued by an actuary and ensure that you receive advice from a qualified independent financial advisor. Again, you can find expert financial advisers in your locality on www.armchairadvice.co.uk

What are your redundancy entitlements in regard to length of service?

Your basic legal entitlement depends on how long you have been continuously employed by your employer and your weekly pay (up to a legal limit). The maximum number of year's continuous service that can be counted for statutory redundancy payments purposes is 20 and the current weekly pay limit is 290.

I've heard somewhere that MPs receive a redundancy package when they fail to be re-elected? Does this also apply to local councillors?

The job of an MP is to represent his constituency in the national parliament and for this he is paid a salary. Councillors are not employees of the council but instead are elected representatives of their community and therefore do not receive salaries or wages. As such they are not entitled to receive a redundancy package if they are not re-elected.

I am about to be made redundant on 22nd June after 23 years (19 with the Civil Service and four with an outsourced supplier). I want to use my redundancy payment to settle my credit card and loans. I have to claim Job Seeker's Allowance, so an insurance policy will pay out to cover my mortgage. How would my redundancy payment affect my claim for Job Seeker's allowance? I have paid full NI contributions.

Redundancy payments have no effect on your entitlement to contribution-based Jobseeker's Allowance. Contact your local Jobcentre as soon as you can to discuss the assistance they can give you in finding a new job, the benefits that are available to you and to use the other services and information that a jobcentre provides to help you. You will be entitled to claim for up to 26 weeks.

I'm about to be made redundant after being at a company for just under three years. What are my statutory rights and can I expect anything from the company?

Your basic legal entitlement is for one week's pay (at the current weekly pay limit) for each year of continuous employment. The minimum you can therefore expect will be two week's pay at the weekly pay limit of 290, however it is possible that your employer may be more generous than this if your weekly pay exceeds the weekly pay limit.

I am about to close my company down through ill health. There are funds left in the company account that my accountant tells me I can take out by selling my shares and I will not have to pay tax on as it will come under capital gains.

I have worked for the company for seven years and I am 51 years old. When I asked him about redundancy pay he tells me it's a bit of a grey area as a director I could not be entitled to redundancy.

I think your accountant is correct and you will not be entitled to redundancy pay.

Redundancy occurs when you are no longer required to work, through no fault of your own. This usually happens because your employer no longer requires your job to be done by anyone. It is the job that becomes redundant, not you. Redundancy can occur for a number of reasons, for example :

- a general downturn in production, sales or economy
- the introduction of new technology
- business re-location
- the business merges with another business, or is sold, or
- an internal company restructuring occurs.

In this particular case it seems clear that the owner is retiring through ill-health of his own choice, his position is not becoming redundant.

The opinions expressed are Greg's, not the programme's. The answers are not intended to be definitive and should be used for guidance only. Always seek professional advice for your own particular situation.


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