As furlough is wound down, what are your rights if you lose your job?
With just over a month to go until the end of the government's coronavirus furlough scheme, many are worried about their jobs.
Thursday, September 17 was described by the UK's second largest trade union Unite as a “milestone” because employers making 100 or more people redundant are legally obliged to give them 45 days’ notice, and that date marked the beginning of the countdown.
The job retention scheme supported millions of employees as the Covid-19 pandemic and resulting lockdown forced many businesses to close.
But now, with less than 45 days to go, unions are warning of the “redundancy floodgates” opening as the chancellor cuts off support for jobs.
If you are among those laid off, what are your redundancy rights?
What is the legal notice period?
The statutory redundancy notice periods are as follows:
at least one week’s notice if you've been employed for one month to two years
one week’s notice for each year if employed between two and 12 years
12 weeks’ notice if employed for 12 years or more
You are legally entitled to a consultation period, the length of which is determined by how many employees the company is making redundant.
If your employer is making 20 to 99 people redundant, the consultation must start at least 30 days before any dismissals take place.
In circumstances where 100 or more employees are set to be made redundant, the consultation must start at least 45 days before any redundancies occur - which is why Thursday is such a red letter day.
Will I get redundancy pay?
It's important to note that if you have been on furlough during the Covid-19 pandemic, you have the same redundancy rights, including redundancy pay.
You’ll normally be entitled to statutory redundancy pay if you’re an employee (ie not contracting or freelancing) and you’ve been working for your current employer for two years or more.
You may be entitled to better redundancy terms under a work contract, so do check that as you may eligible for more money than what you would receive on statutory pay.
Outside of a work contract, what you will get is again based on your length of service (which is capped at 20 years), and your age.
half a week’s pay for each full year you were under 22
one week’s pay for each full year you were 22 or older, but under 41
one and half week’s pay for each full year you were 41 or older
Your weekly pay is the average you earned per week over the 12 weeks before the day you got your redundancy notice.
If you were on furlough and being paid less than usual, your redundancy pay is based on what you would have earned in normal circumstances.
For example, if your weekly pay is usually £300 but you received 80% pay while on furlough, your redundancy pay must be your full normal pay of £300 a week.
If your pay is different each week, your weekly pay must be worked out by using the 12 weeks leading up to the day you got your redundancy notice. Your pay must be topped up to 100% for any hours you were furloughed.
The maximum weekly amount you can get on statutory terms is £538 - even if you earn more per week.
I've been on flexible furlough, does that change my rights?
You will still be entitled to the same payout.
Workplace advice expert Acas give an example of a 30-year-old employee who has worked for a company for six years and is now being made redundant.
They normally work 30 hours a week at £10 an hour, but agreed to be furloughed for half this time during the pandemic and they are put on flexible furlough receiving 80% pay for the remaining 15 hours.
Their wage on flexible furlough must be topped up to 100% so they are legally entitled to receive £300 a week redundancy pay as usually.
If you were made redundant on or after April 6, 2020, your weekly pay is capped at £538 and the maximum statutory redundancy pay you can get is £16,140.
If you were made redundant before April 6, 2020, these amounts will be lower.
Redundancy pay (including any severance pay) under £30,000 is not taxable.
Your employer will deduct tax and National Insurance contributions from any wages or holiday pay they owe you.
Notice period
Your employer must pay you throughout your notice period (check your contract for the exact terms) or pay you in lieu of notice depending on the circumstances. Again, if you've been earning less because of being furloughed due to the coronavirus pandemic, your notice pay is based on what you would have earned normally.
ConsultationYou’re entitled to a consultation with your employer if you’re being made redundant.
This involves speaking to them about why you’re being made redundant and whether there are alternatives to redundancy ie a move into a different department.
This usually takes the form of a face-to-face meeting with a manager and a HR representative, but it can also take place over the phone or on a video call if you both agree to it.
By law you must meet at least once, but, depending on your questions or requests, you may meet several times.
The number of employees being made redundant at the same time affects the nature of the consultation.
If your employer is making up to 19 people redundant, there are no rules about how they should carry out the consultation, but any more than that and the collective redundancy rules apply.
What are the collective redundancy rules?If your employer is making 20 or more employees redundant at the same time, the consultation needs to take place between your employer and a representative, which could be a trade union rep or an elected employee.
The consultation must cover ways to avoid redundancies, the reasons for redundancies, how to keep the number of dismissals to a minimum and how to limit the effects for employees involved. This could, for example, involve being offered retraining, job seeking or speaking to a careers advisor.
If you’re being made redundant, you can stand for election as an employee rep or vote for other reps.
Fixed-term contract employees
Your employer does not need to include you in collective consultation if you’re employed under a fixed-term contract, except if they’re ending your contract early because of redundancy.
If your employer is insolvent
If you're losing your job because the company you worked for has closed, you can apply for redundancy pay and may be entitled to other related payments from the government, through the Redundancy Payments Service (RPS).