What to do if you lose your job
They say that when your next-door neighbour loses their job, it’s a recession, but when you do it’s a depression. Nearly all of us have been affected in some way or another by the current economic climate, and many people will know at least one person who has lost their job as a result.
Official figures show that unemployment in Britain is now close to two million – the highest level since 1997. While the government is trying to reassure the UK population that things won’t get much worse, there is a very real fear that unemployment levels could hit the three million mark at some point in 2009.
It’s therefore inevitable that the threat of redundancy looms large for many of us. Although it is something that you would probably rather not think about, it’s best to be prepared and at least know what your rights are so you are in a strong position if the worst happens.
Q: On what grounds can I be made redundant?
A: The main reasons for redundancy are; the job you were hired for no longer exists; your employer needs to cut costs by reducing staff numbers; the company is closing down or moving; or if new technology or systems at work have made your job unnecessary.
Q: On what grounds can I NOT be made redundant?
A: Some of the main reasons would be if you are on parental or maternity leave; because you only work part-time; have requested flexible working arrangements; for whistle–blowing or being a member of a trade union; or participating in union activities. For a complete list of reasons see the redundancy section of the Advisory, Conciliation and Arbitration Service's website.
Redundancy should always be the last option taken when all other avenues have been explored.
Q: What is the procedure for redundancy?
A: When an employer makes collective redundancies (i.e more than 20 redundancies in a 90-day period) then it must consult the relevant employees and/or their representatives.
If an employer is making less than 20 redundancies, this is known as an individual redundancy. It still has a duty to ensure that it has selected the redundancy candidates fairly. It must warn and consult the employee about possible redundancy, as well as take reasonable steps to help you find further work, such as CV help and interview advice. It should also allow you to attend interviews and pay statutory redundancy pay where it is due.
Q: How do employers decide who is made redundant?
A: Redundancy isn't a popularity contest and no names should be pulled out of hats. The reasons should be as objective as possible to ensure that those selected for redundancy aren’t unfairly nominated. Instead, the reasoning is based on employees’ skills and their role within the company. Criteria might include:
• Attendance record
• Disciplinary record
• Skills or experience
• Standard of work performance
• Aptitude for work
If you think your attendance record has been affected by extenuating circumstances, such as illness, then you can add notes to explain this.
Q: What do I do if I feel that I have been unfairly or wrongly dismissed?
A: Redundancy itself counts as a ‘potentially fair’ reason for dismissal. However, if you believe you are being made redundant as a cover up for other reasons or the redundancy procedure doesn’t seem correct, then you could claim unfair dismissal. You could also make a claim for wrongful dismissal if you feel your contract has been breached.
You need to make an unfair dismissal claim to an employment tribunal, or industrial tribunal in Northern Ireland. To make a claim, you generally need to have worked for your employers for more than one year. After you have filed your claim, your employer must prove that it has investigated the situation adequately and followed the correct steps in statutory minimum dismissal procedure.
With wrongful dismissal you would have to take the matter to an Employment Tribunal. Unlike unfair dismissal, there is no minimum time period that you need to have worked for your current employer.
If you’re not a member of a trade union, then speak to an HR representative to see how to best go through the above procedures with your employer. Contact the Advisory Conciliation and Arbitration Service for free, unbiased advice on all employment right issues – its helpline (08457 474747) is open from 8am to 6pm every weekday. Residents in Northern Ireland should contact the Labour Relations Service on 028 9032 1442.
Q: How much redundancy pay should I expect to receive?
A: Redundancy pay is a lump sum that you are entitled to as a form of compensation. How much you get depends on your age, your weekly pay and how long you have been with the company. You also need to have worked with your employer for at least two years to qualify for statutory pay.
Employers may choose to offer redundancy pay even if you don’t qualify for this but this is entirely up to them. Casual workers - including those employed by agencies - have no legal right to redundancy pay even if they have been with a firm for more than two years.
Statutory redundancy pay is worked out as follows:
• One and a half week’s pay for each complete year of employment when you were aged 41 or over
• One week’s pay for each complete year of employment when you were aged between 22 and 40
• Half a week’s pay for each complete year of employment when you were aged under 22
However, bear in mind that only £380 of your weekly pay will be taken into account when statutory redundancy pay is calculated.
You don’t need to make a claim for redundancy pay as your employers should pay you directly. It should also send you calculations of your redundancy pay.
The first £30,000 of redundancy pay is tax-free, but any amount over this could end up being taxed.
If you haven’t received payment shortly after your date of dismissal, then you should apply to an employment tribunal as soon as possible.
In the event of your company going bust, the Redundancy Payments Service (RPS) will pay you directly from the National Insurance funds.
You can also contact the Redundancy Payments Helpline on 0845 1450 004 if you think your employer’s calculations are incorrect.
Some employers also have redundancy arrangements in place above and beyond the statutory requirements. Ask your HR department and check your contract or staff handbook.
Q: What next?
A: Much like when someone tells you not to scratch an angry insect bite, you know you shouldn't panic but you just can't help it. But try to remain calm. The key thing to remember is that you have been made redundant rather than fired so the skills and knowledge that you have are not being questioned.
Use the time that you have off to assess if you want to look for a similar job or if it’s time for a career change. If you’re stuck for ideas or want to go through different options contact the Careers Advice Service on 08080 100 333.
Wait until you feel calmer about your situation instead of applying for the first job that comes along – yes, Domino's is on a recruitment drive but you don’t have to apply for it. Your redundancy pay should buy you a little bit of time.
Q: What about benefits?
A: Jobseekers' allowance (JSA) is worth £47.95 a week for those aged 18–24 and £60.50 for anyone over 25. To claim this you need to show that you are actively seeking work.
Your level of savings and national insurance contributions also affect how much you will receive. Contact your local JobCentre Plus office to find out what you are entitled to and to apply for JSA – and find out if you are eligible for further benefits.
You can find your nearest centre at jobcentreplus.gov.uk.
A scheme originally established in 1944 to provide protection against sickness and unemployment as well as helping fund the National Health Service (NHS) and state benefits. NI contributions are compulsory and based on a person’s earnings above a certain threshold. There are several classes of NI, but which one an individual pays depends on whether they are employed, self-employed, unemployed or an employer. Payment of Class 1 contributions by employees gives them entitlement to the basic state pension, the additional state pension, jobseeker’s allowance, employment and support allowance, maternity allowance and bereavement benefits. From April 2016, to qualify for the full state pension, individuals will need 35 years’ of NI contributions.