2018 has been a devastating year for high street retailers. More than 50,000 jobs are estimated to have been lost. Household names such as House of Fraser and Marks and Spencer have plans to close stores, whilst Toys R Us and Poundworld have closed their doors for good.
With the future of the high street looking bleak, do you know your redundancy rights?
Employees with more than two years’ continuous service are entitled to a statutory redundancy payment from their employer. This payment is calculated based on your age, length of service, and weekly wages (but with a maximum cap on a week’s pay, currently £508).
Some employers run enhanced redundancy schemes. These can include redundancy payments that exceed the statutory minimum. You should check your employment contract and company policies to see if this applies.
You must be given the correct notice of termination as well. This will be set out in your employment contract. You might be asked to work some, or all, of your notice period. However, it is more common to receive a payment in lieu of notice in redundancy situations.
You should check your employment contract to see whether there is a clause relating to receiving payment in lieu of notice. This may specify whether you are entitled to receive all earnings and benefits that you would have received during the notice period, or only your basic pay.
Your employer should run a consultation process that enables a dialogue. This must be more than a box-ticking exercise. Consultation should be meaningful. Employees should have their questions about the proposals answered and employers have a legal obligation to explore alternatives to redundancy.
If 20 or more redundancies are being proposed at one establishment, there are collective consultation rules that must be followed. These include minimum periods of consultation (at least 30 or 45 days, depending on the number of redundancies). Employers must also arrange for the appointment of employee representatives, who are spokespersons for other staff during the consultation process. Employers that flout these rules can incur severe penalties of up to 90 days’ pay per employee affected.
Your employer might identify a new role for you or they might suggest redeploying you in a new location.
If the offer represents a minor change in your job role, and you reject it, you might be seen as having acted unreasonably. Employees that unreasonably refuse alternative employment can forfeit their right to a redundancy payment by doing so. Therefore, you should give careful thought before rejecting any alternative offers and take legal advice where necessary.
In insolvency situations, employers may not have the ability to pay their redundant employees.
There are special rules that apply when a company is insolvent. You should contact your employer’s insolvency practitioner. They should provide you with the details for submitting a claim to the Insolvency Service, who operates a government insurances scheme that can process claims for redundancy pay, unpaid wages, holiday pay, notice pay, the basic award for unfair dismissal and unpaid pension contributions. We can also assist you with the steps to take when making an application.