Facing Redundancy

Redundancy is always a blow, no matter how much warning you received. You may feel that:

• you’ve lost a job that you found rewarding
• you will miss colleagues you knew well
• your family’s social and economic security is threatened.

It will be difficult to find anything positive in the situation at first, and you will go through a time of bereavement during which you need to take time to adjust and gather yourself together. But take some heart from the fact that many people eventually come to find that they ultimately benefit from the changes enforced through redundancy.

Online help

Redundancy Help http://www.redundancyhelp.co.uk

The Department of Business, Enterprise and Regulatory Reform offers much information relating to redundancy rights and payments:

Check on statutory redundancy payments by calling the Redundancy Payments Help line on 0845 1450 004

Visit the BERR site www.berr.gov.uk/employment/redundancy/index.html: there you will find a guide for employees on statutory rights and entitlements as well as links to regulatory guidance, answers to frequently asked questions and details of local Redundancy Payment Offices.

www.direct.gov.uk/ provides on-screen help and links covering redundancy and consultation procedures, selection of redundancy personnel, redundancy pay and where to get help.

Business Link http://www.businesslink.gov.uk

http://www.businesslink.gov.uk/bdotg/action/layer?r.l1=1073858787&topicId=1073876974&r.s=tl

Citizens Advice Bureau Redundancy Advice has some general information on redundancy

http://www.adviceguide.org.uk/index/life/employment/redundancy.htm

Fact sheet for employees is at:

http://www.adviceguide.org.uk/e_redundancy.pdf

Worksmart has some useful information too at http://www.worksmart.org.uk 

ACAS, Brandon House, 180 Borough High Street, London, SE1 1LW. Tel: 020 7210 3613

http://www.acas.org.uk/index.aspx?articleid=374

The ACAS help line offers free, confidential and impartial advice on all employment rights. Tel: 08457 47 47 47 8.00 am to 6.00 pm Monday to Friday.

Redundancy payments

If you receive a redundancy payment that is under the limit for taxation (£30,000 in 2007), you will not need tax advice. Most people do not come out of redundancy with enormous sums of money, but if you are in the ‘golden handshake’ league, you should seek advice on how to minimise the tax requirements. The limits change periodically, so look at the FAQs page of the Government’s BERR site to check on the current limit: www.berr.gov.uk/employment/redundancy/index.html.

Many people come away from their redundant job with little or no money, especially if they have not been in their redundant position for long. Not all employers pay over the statutory minimum, and in the case of insolvent companies employees may not get any additional payment at all. If you are unfortunate enough to find yourself in this sort of situation, you may need to:

• find out what is involved in claiming benefits and what rights you have
• be aware of the risk of loan sharks, who sometimes gather in areas where there have been redundancies to offer loans with extortionate repayment arrangements.

At the opposite extreme, some people presented with tax-free redundancy pay may be tempted to splurge at least some on a big holiday or a flashy new car. This sort of action would be short-sighted, until you have found another job, so:

• seek independent, professional advice on how to look after your money
• don’t spend any large, unnecessary sums until you are in employment again
• check out whether you are eligible for any state payments such as Unemployment or Supplementary benefit.