More than 3000 people are made redundant every working day. You may not
be able to avoid it. But knowing the rules helps.
Selection for redundancy, which is a form of dismissal, has to be fair
and transparent. You cannot be dismissed on grounds of age, sex, marital status,
union membership or for any other non-work related reason. But if you have
worked for an employer for less than a year you can be dismissed without a
reason as long as it does not break discrimination rules.
Your contract will set out your rights to redundancy pay. If there is
nothing in the contract then you are entitled to the statutory minimum if you
have worked for your employer for at least two years.
The minimum redundancy payment is one week’s pay for each year you have
worked for that employer between the ages of 22 and 40. For each year under age
22 it is half a week’s pay and years aged 41 or more it is one and a half
weeks’. There are two upper limits. Pay above £350 a week is not counted nor are
years of service above twenty. So the maximum redundancy payment is £10,500. If
your employer has gone bust the payment is made by the Government. Redundancy
pay up to £30,000 is tax free.
When you leave work claim Job Seeker’s Allowance at the local Jobcentre
Plus. That can be as low as £64.30 a week (less under age 25) but it can be more
and can also pay for your mortgage or council tax. It will guarantee that
National Insurance contributions are paid.
At the end of the tax year make sure you have not paid too much tax as it
is calculated assuming you will work all year. If you get tax credits they
should rise if you tell the Revenue that your income has dropped.