Redundancy in the Recession – Is there anything you can do?
During a recession it is not uncommon for businesses to make redundancies. Often it becomes necessary to reduce costs to keep the business from making a loss, and one of the largest costs to a business can come from its employees.
Being made redundant can be a heart-breaking and distressing experience. Although redundancy usually cannot be avoided, sometimes you may feel that you have been unfairly treated. So what are your rights and is there anything you can do to ensure you get what you are entitled to?
Your employer must provide a warning in writing beforehand that redundancies are going to be made within the business. The advantage of this is that it provides you with an opportunity to seek alternative options for employment elsewhere.
If you are selected for redundancy, your employer must hold a meeting with you and a representative of your choice to discuss the situation further. This may include an independent representative from your HR department or a trade union representative. They should provide the reasons for their decision and give you a chance to appeal or work out a different situation.
If you have been selected for redundancy then you are entitled to work your notice period as set in your contract of employment. Alternatively, you can take ‘gardening leave’ with full pay if your employer allows it.
It’s likely that each employer will have their own conditions when it comes to redundancy pay. However, if you have been in continuous employment at your current company for more than two years, you will be entitled to statutory pay of some sort. You can expect to receive two weeks’ pay for every year of service if you are over the age of 22, meaning you would receive almost a month’s pay if you have been with the company for two years or more.
To receive a payment you must have been made redundant, and not resigned at the time when redundancies were being made. You can choose voluntary redundancy if this is offered to you, in which case it’s likely that you will receive a payment that is set beforehand by your employer.
In all cases, a redundancy payment under £30,000 is not taxable but we would recommend that you ask on advisor to clarify your individual situation
Ways to stop redundancy
If you are told that you are being made redundant then it is always worth trying to argue your case for being kept on if you believe you can find ways to save the company money. If you think you are worth keeping on you can try to ask to move to a different area of the business where there isn’t a need to cut numbers.
Other factors that may help are to take an indefinite pay-freeze, reduce your working days or hours, or to stop taking extra benefits like a company car or private healthcare. Your employer may appreciate your flexibility and be willing to listen to ways to prevent more redundancies from happening.
Unfortunately though, it’s likely to be a very difficult task to persuade them otherwise, as usually redundancies are only made in a last-resort situation where the financial stability of the business is under real threat.
Some people often believe that they are being made redundant for reasons other than those in the company’s financial interest. ‘Bumping’ for example is when someone is made redundant and then another member of staff comes in to fill their place, usually due to a reorganisation of workloads within the business. At other times it may be because technology may be able to do the job you currently do; this is increasingly common in factories.
Your employer should only make redundancies on a merit-only basis and not have favouritism towards certain members of staff. Warning must be given and any potential for relocating your position within the business must be explored first.
If you believe that you have been made redundant unfairly then there are steps you can take. The first action is to complete an Unfair Dismissal form; a trade union, if you are a member of one, or a professional UK solicitors firm can help you to complete this.
QualitySolicitors can help you make a claim for unfair dismissal if you have been made redundant for reasons you don’t believe are valid during the recession. We have a number of employment law solicitors, with years of experience, who can talk to you confidentially and assist you in getting a positive result in your case.