What are your redundancy rights during the Covid-19 pandemic?

The government’s Coronavirus Job Retention Scheme has no doubt prevented a number of redundancies since the start of the Covid-19 pandemic, but the scheme will be drawing to a close in the coming months, which may have left you wondering what this means for you and your job. If you have been furloughed, does this mean you will have a job to go back to? Can you still be made redundant even while on furlough?

Answering your questions surrounding redundancy and the Coronavirus

Businesses are feeling the financial effects of the coronavirus and there are of course going to be a number of job losses in the coming months. If yours is one of them though, what are your rights, and are they the same as they were in a pre-Covid world?

It’s important to remember that being made redundant is not the same things as being fired or getting the sack. It may feel like that at first, but future potential employers will not see it that way and nor does the law. If you are made redundant, it’s because your employer can longer sustain your role, and you have certain rights.

What if you are made redundant but your colleagues weren’t?

It may be that your employer could afford to keep some jobs open, but not all of them. If this was the case, then by law you cannot have been selected for redundancy based on your age or gender, whether you are pregnant or have children, whether you have asked for holiday or maternity leave, because you are a member of a trade union or if you are a whistle-blower. Criteria that can be used however, include disciplinary records and your length of service – put simply, if you were the last to be employed, you could justifiably be the first to be made redundant. Finally, some firms may open redundancy up to volunteers – although they are under no obligation to then accept those volunteers.

Can you be made redundant while furloughed, and will you be given any warning?

Yes you can, but the same rules apply. Your employer also cannot just make you redundant on the spot. Your length of service will determine the notice period you need to be given, with at least one week’s being required if you’ve worked for your employer between one month and two years, and a further week for each year after that. This is capped at 12 years, after which period a flat 12 -week notice period is required, regardless of length of service.

Are you entitled to redundancy pay?

Once you have worked for your employer for more than two years, you have the legal right to redundancy pay. The statutory minimum is calculated from your age, length of service, and salary. You can expect to get at least half a week’s pay for each full year worked when you’re under 22, a week’s pay for each full year worked if you’re between 22 and 41and one and a half week’s pay for each full year worked if you’re 41 or older. Some employers are more generous so it’s worth double-checking your employment contract to see if you are owed more than this and if you still have unused holiday you are entitled to be paid for that too.

Do you have to pay tax on redundancy pay?

It depends on how much your redundancy payout is worth. If you get less than £30,000 as part of your redundancy package then this will be tax-free. Be aware though that any non-cash benefits, such as a company car or computer, will be given a cash value and added to your redundancy pay entitlement. After £30,000, any remaining part of your redundancy package will be taxed.

If you do find yourself facing redundancy, don’t panic. Keep your eyes on your life goals and we will do what we can to help you achieve them. We’re always here if you would like to talk to us.

This article does not constitute financial advice and should not be construed as such.