Do you know what your redundancy rights are?

When employers gear up to cut jobs in order to face recession, you may find yourself in the position of being made redundant. If this is the case, you have to know what your legal rights are and how you can handle this situation.

What does redundancy mean?

You may be made redundant as a consequence of two main reasons: whether your employer needs to reduce its workforce or your job is simply no longer required. Both reasons are caused by the necessity of slashing costs or by new technology making a job or a person unnecessary. On the other hand, a business could be forced to recur to redundancies because it is closing down permanently or moving elsewhere. The result is that people lose their jobs via redundancies because their jobs cease to exist. Protection for being made redundant or being fired unfairly is provided by the Employment Act 1996.

What if you are made redundant?

In case you are made redundant, you have three options: to work out your entire notice period, go on paid “garden leave”, or receive pay instead of notice. Before deciding which option to choose, you are advised to carefully read your written contract of employment and find out exactly how long the notice period is. If you decide to leave early as a result of an agreement with your employer, you are still eligible to receive your pay. Redundancy remuneration is also due for employees with a fixed-term contract that is not renewed when it comes to an end. Employers have to follow a legal procedure, which means they have to explain in writing the reasons of their action, hold a meeting with the employee assisted by a representative, and even hold an appeal meeting if you decide to contest the redundancy.

When more than 20 people are made redundant within a period of 90 days the trade union or another representative has to be consulted before any notice is given.

You should receive money, but how much?

Although a particular employer may have its own terms with respect to redundancy, all employees have the right to redundancy pay if they have worked for that employer for at least two complete years. Employers usually have a redundancy policy that in many cases is superior to the legal minimum. While most employers offer two weeks or more for every complete year of service, some of them offer more and it is important that you negotiate the best offer you can.

What comes after redundancy?

Assuming you have received your pay does not necessary mean your troubles are gone. They may just begin. You are unemployed, no money comes in any more, but you have a lot of payments to make. What you need is to look at a second business opportunity, if you feel comfortable with continuing to work or expect your retirement income to match your working income. As a second income, you may think to start a home-based business on your own or to look for another employer and hope to get and keep that job for a longer time.