Tag Archives: Redundancy

This guest post comes from experienced career consultant Simon North, Founder of Position Ignition and creator of the Career Ignition Club. Here he looks at the range of thoughts and emotions that come with being made redundant.

“Redundancy is horrible; it is also a fact of life and it’s happening to more and more people with more and more regularity. It’s just a part of our changing world and it is the acceleration of change that is impacting on employment. So what is it that we can do to help ourselves if we’re affected by redundancy? These 10 steps will help you to deal with redundancy.

If redundancy is a shock to you, you are going to recoil from that, and dip into the classic stages of change, which will mean that you move from shock to denial. Whether your redundancy has been quick and came out of the blue, or whether it’s been a slow burn through a long period of time, you are likely to go through those emotions. You have to get through it. We always do but the sooner you can focus on what’s important to you, the sooner you will move on. Continue reading “10 Steps to Dealing with Redundancy” »

You can’t have escaped the recent turmoil in the High Street as Comet went into liquidation and then HMV, Jessops and Blockbuster entered into administration. Others may well follow.

If you work for a company that is in a dire financial position, you will be concerned not just about retaining your job, but whether you will get paid for outstanding salary and what your redundancy entitlements are.

We asked our legal expert Philip Landau where you stand if this is something that your employer is facing…

“There is a difference between an employer being in liquidation and administration. If your employer is in liquidation, there is no continuing business and you will be out of a job. Where your employer is in administration, however, an administrator will be appointed to see if the business can be kept alive pending a transfer in whole or part to a new buyer. There are limits on making any legal claim against your employer in an insolvency situation.

The administrator who is appointed to run the company has a period of 14 days after their appointment to decide if they want to retain the company’s employees- or offload the costs of those employees by dismissing them. If you are dismissed within the 14 day period, you become an “ordinary creditor” within the administration (alongside other ordinary creditors). If the administrator retains you on the other hand, you become a “preferential creditor” where you would stand a better chance of recovering outstanding salary and redundancy payments if the company ultimately went under.

If a buyer for the business is found, your employment rights and previous terms of contract are generally protected and transferred to the new owner under the Transfer of Undertaking (Protection from Employment) Regulations (“TUPE”). This includes your continuity of employment and any outstanding payments owed to you. There are some circumstances, however, where your contract terms can be varied by an administrator as being necessary for the survival of the business. This is deemed a “permitted variation”. You could, therefore, find yourself being forced to accept some changes to your terms of employment in relation to the transfer of the business.

If a buyer of the business cannot be found and therefore insolvency is the only option, the Insolvency Act 1986 limits what you can recover in money terms as a preferential creditor. This includes:-

• Outstanding salary (which also includes commission) for the four-month period immediately preceding the insolvency- up to a ceiling of £800.
• Accrued holiday pay (up to 6 weeks)
• Certain occupational pension payments.

Any additional amount you are owed (or relating to periods longer than four months) rank as ordinary debt only along with the bulk of other creditors.

If you find there are insufficient funds to pay you from the insolvent business, you can apply to the National Insurance Fund (“NIF”) for outstanding payments including salary, notice, holiday and redundancy pay. The NIF is operated by the Redundancy Payments Office, although the process can be complex and time consuming.

In order to qualify for NIF payments your employer must be insolvent and your employment needs to have terminated. You must also have done everything you can to get your payment, including applying in writing to your ex-employer for the payment within six months of the date your employment ended. Continue reading “Your employer’s insolvency often means fast-track redundancy – but will you get paid and what are your rights?” »

It’s a very worrying time for anyone facing a potential redundancy situation, and often difficult to know where you stand.

In this post our legal advisor Philip Landau provides some answers to the most commonly asked questions…

What is redundancy?

Redundancy occurs where:

• The employer’s business, or part of the business, has ceased to operate; and/or
• The employer’s business has moved to a different place; and/or
• The need for work of a particular type to be done has ceased or diminished.

Examples of redundancy situations

Examples of when someone may be genuinely made redundant include:

• The work the person does is no longer required, perhaps due to the employer moving into a new line of work which no longer needs the person’s skills, or a new process is introduced so that the job that was carried out is no longer necessary
• The employee’s job no longer exists because the work is being done by other employees
• The workplace has closed because the employer has ceased trading or has become insolvent
• The employer’s business, or the work the person is doing, moves to another location
• The employer’s business is transferred to a different employer

Even if there is a genuine redundancy situation, your employer must still follow a correct redundancy process (see below) failing which the redundancy can still be deemed to be an unfair dismissal.

Classic examples of non –redundancy situations

Employers often claim that there has been a reduction in the work needing to be done but this is not always the real reason for dismissal. It can be cheaper and less time consuming to label someone “redundant” rather than follow, say a performance process that could take many months. It may be that the employee is simply disliked and redundancy can be used as an excuse to fast forward that person’s exit from the company. It is important to look at all the circumstances surrounding the redundancy. Continue reading “How Easy is it For Your Employers to Make You Redundant and What are Your Rights?” »

There is often ambiguity around notice periods – e.g, how long can they be? How much do you have to give? – so to help clarify the situation as much as possible we have put some of the most asked questions to our legal expert Philip Landau…

What notice are you entitled to receive?

Although you can agree specific notice with your employer, which forms part of the terms of your contract of employment, there are statutory minimum notice periods which apply. These are:-

• Between 1 month and 2 years worked – 1 week’s notice
• Between 2 and 12 years – 1 week’s notice for every year worked, up to a maximum of 12 weeks

For example, if you have worked 10 years, in the absence of any contractual provision, or where your contract provides less than the statutory minimum, you would be entitled to 10 weeks notice.

What notice must you give to your employer?

Usually, your contract of employment will specify what notice period you are required to give if you resign, although this can be varied by agreement.

If your contract is silent, the statutory minimum period of notice to be given by you if you have been employed one month or more is 1 week. A much longer notice period may however be implied if it is reasonable in all the circumstances (i.e. what is normal for someone of a similar seniority in your industry sector).

If you wish to leave before the end of your contractual notice, in practical terms, your employer does not have a great deal of options. Your employer cannot force you to work, even though you may be in breach of contract. In certain circumstances, your old employer may, however, be able to obtain an injunction to stop you working for your new employer during the notice period, but they would have to show that the new employer is a direct competitor and that there was a legitimate need to protect your old employer’s interests. Such claims are likely to be brought against senior executives only.

Your old employer may also bring a claim against you for the additional costs arising from your breach of contract (such as the cost of replacement staff for the balance of the notice period.) Again, such claims are very rare and they are more likely to be brought against senior personnel only.

What is “pay in lieu of notice”? Continue reading “Notice Periods – Your Questions Answered” »