Coronavirus: redundancy advice
Redundancy is when you lose a job because your employer needs to reduce their workforce. The information on this page covers your rights if you have been made redundant from a job where you were an employee on a PAYE contract. The information on this page does not apply to any contracts or jobs you lose during self-employment.
If you are a director of a limited company that has entered liquidation, you may be able to claim statutory redundancy payments if you were also an employee of the company. See the section Insolvent employers.
Help if you’re being made redundant
Your employer may be able to use one of the government’s support schemes to help you stay in employment.
If you have been made redundant, you should check what benefits you are entitled to claim.
See our Coronavirus and your income section for more information.
Is your redundancy fair?
You can only be made redundant if your job is no longer needed. You have the same rights during the coronavirus pandemic as usual.
You should have a consultation with your employer if you’re being made redundant. Your employer should explain what is happening and you should get the chance to ask any questions. If 20 employees or more are being made redundant, your employer can carry out this consultation through a representative, such as a union representative. More information about the consultation can be found on the Money Helper website.
Your employer should be fair when deciding who they make redundant. They could, for example, ask for volunteers or check disciplinary records. There are some things that shouldn’t play any part in you being made redundant, such as your age and gender. For a fuller list, see GOV.UK.
If you don’t think that your employer has been fair, contact ACAS for impartial advice on your workplace rights.
You might be offered ‘suitable alternative employment’ within your organisation or an associated company. You have the right to a four-week trial period in the alternative job. You do not have to take the job if you think it’s unsuitable, however you may lose your right to redundancy pay if you unreasonably turn down an offer of alternative employment. See the ACAS website for more information on alternative job offers from your employer. Your redundancy could be an unfair dismissal if your employer has suitable alternative employment and they do not offer it to you.
If you’ve been with your current employer for 2 years or more you would normally get statutory redundancy pay. You should receive:
- half a week's pay for each year of employment up to age of 22;
- one week's pay for each year between the ages of 22 and 40; and
- one and a half week's pay for each year over the age of 41.
This is up to a maximum 20 years of work.
If your recent wage has been lower because you had been ‘furloughed’, your redundancy pay should be based on your pre-furlough salary.
The maximum statutory redundancy pay you can get is £16,140. If you were made redundant before 6 April 2020, these amounts will be lower.
You can calculate your statutory redundancy pay using the GOV.UK tool.
If you don’t think you’re employer has paid the correct amount of redundancy pay, contact ACAS for more help.
If you are made redundant your job should not end straight away. You should get a paid notice period. Although your employer can give more, the statutory redundancy notice periods are:
- at least one week’s notice if employed between one month and 2 years;
- one week’s notice for each year if employed between 2 and 12 years; or
- 12 weeks’ notice if employed for 12 years or more.
Unless you are off work, you should receive your normal pay whilst working your notice period. ACAS has more detailed information about notice periods and the pay you should receive.
Your employer can make a ‘payment in lieu of notice’. This is where you get all your notice paid at once and your job ends straight away. Or your employer can put you on garden leave. This means you’ll be paid as usual, but you don’t have to come to work.
Check your contract and speak to your employer if you’re unsure what notice period you should receive.
Finding a new job
You can contact the Rapid Response Service if you suspect you’re going to be made redundant or up to 13 weeks after you’ve been made redundant. They can, amongst other things, help with writing CV’s, find the right training and travel costs.
You can contact Rapid Response Service by email at firstname.lastname@example.org.
Your employer may be insolvent. This means they aren’t able to pay their debts. If your employer is insolvent and makes you redundant, they might be unable to pay you the money you are entitled to.
You may be able to apply for redundancy pay and other related payments from the Government, through the Redundancy Payments Service (RPS).
Find out more about your rights if your employer is insolvent on the GOV.UK website. There is also guidance available if you were furloughed and then made redundant because your employer is insolvent.
Limited company directors
If you are a director of a company that has gone into liquidation, you may be entitled to statutory redundancy payments through the RPS if:
- you worked at least 16 hours a week;
- you were an employee for at least 2 years; and
- a contract of employment was in place. If there was no written contract, you will need to show the liquidator that there was a verbal or implied contract. For example, this could be by showing that you were paid through PAYE and that your worked similar hours to other employees.
You should make your claim to the RPS within six months of the date of liquidation.