Looking for work when facing redundancy

Jobsearch, Jobseekers / 11 January 2023

When you face redundancy, one of your first thoughts will probably be, ‘I’d better find a new job’. Of course, you can begin your job search immediately, but do you know under what conditions you could start a new job during your notice period and still receive your redundancy pay? Let’s start with a definition of redundancy.

What does redundancy mean?

If you are made redundant, this means that your job is no longer needed by your employer. This might happen because:

the number of employees in a team is cut, for instance, a customer service team of five is shrunk down to three due to a reduced workload
a company is restructured, for example, the removal of the middle tier of management
a worksite is closed and there are no jobs at the company’s other locations
a business closes down

Redundancy may be offered on a voluntary basis or you may have no choice in the matter.

What are your rights when you are made redundant?

Should you face redundancy, you have certain legal rights that your employer must adhere to. These include:

A fair process

Your employer must treat their workforce fairly and without discrimination when choosing which employees will be made redundant. Where you believe that you have been treated unfairly, you have the right to appeal.

Minimum notice period

The notice period is the amount of time between being informed of your redundancy and your last day of employment. The statutory redundancy notice periods are:

12 weeks’ notice if you’ve worked for the company for 12 years or longer
a minimum of one week’s notice for each full year worked if your period of employment is between two and 12 years long
a minimum of one week’s notice if you have worked for the company for between one month and two years

Your employer may offer you a longer notice period than mentioned above but they can’t offer you less than this. Check your employment contract to find out what redundancy notice period your employer provides.

Statutory redundancy pay

If you have been an employee of the business for more than two years, you’ll generally be eligible to receive statutory redundancy pay, unless one of the following applies:

your employer offers to continue your employment
you reject suitable alternative employment offered to you by your employer
you are employed as any of the following:
- former registered dock worker and share fisher
- crown servant
- member of the police or armed forces
- domestic servant who is also an immediate family member of the employer
- apprentice not offered employment at the end of training

The amount of statutory redundancy pay you’ll receive is based on your age during employment and the number of years you worked for the business. Your length of service for the purpose of redundancy is capped at 20 years. An average pay is used for each full year of employment.

Age during employment	Statutory redundancy pay
Under 22 years old	Half a week’s pay for each full year
From 22 to 40 years	One week’s pay for each full year
41 years or older	One and a half week’s pay for each full year

This means that if you worked for a company for 21 full years, starting at 25 years old, were made redundant at the age of 46, and met all the conditions to receive redundancy pay, you would receive:

for the years worked from 25 years old to 40 years old = one week’s pay x 16 years
for years worked over 40 years old = one and a half week’s pay x 4 years
nothing for your final year because this would be your 21st year and the cap is 20 years

You can find a useful redundancy pay calculator on the gov.uk website.

Consultation

If your employer intends to make you redundant, you have a right to meet with them to discuss the reasons for your redundancy and whether there are any alternatives, such as employment at another location or reduced hours.

Paid time off to find a new job

Once you have been made redundant and as long as you have worked for your employer for at least two years, you are allowed a reasonable amount of paid time off to find a new job, for instance, when attending a job interview or a training course. However, the concept of ‘reasonable’ is open to debate and your employer doesn’t have to provide full pay for that time off. It may be as little as 40% of your normal pay.

Can you start a job during your redundancy notice period?

You can start looking for a job straightaway, but can you start a new job during your redundancy notice period? The answer annoyingly is, ‘it depends’.

Leaving before the end of your redundancy notice period

You can do this and still hang onto your redundancy payment if your employer agrees to let you leave early. If you finish before the end of your notice period without the agreement of your employer, this will be taken as a resignation on your part and you won’t receive your redundancy pay. Equally, if you leave early without speaking to your employer, this will also be seen as a resignation and you won’t receive your redundancy pay.

When you are put on garden leave

If you are asked to spend your notice period on garden leave, this means that you won’t be expected to go into work during that time but you will still be a paid employee. However, you can’t start a new job during garden leave unless your employer agrees to it. If you start a new job during your garden leave and don’t receive your employer’s agreement, this will be taken as a resignation and you will lose your redundancy pay.

When you receive payment in lieu of notice (PILON)

In this situation, your employment will end immediately and at that point you’ll be paid the full amount that you would have received if you had worked during that notice period. You will also be eligible to receive redundancy pay. The advantage of this option is that you can start a new job as soon as your employment ends.

Wrapping it up

Facing redundancy can be a worrying prospect but your employer must treat you reasonably and legally. You have certain rights, such as a consultation, and you can begin a new job within your notice period if your employer agrees to this. The key to reducing anxiety is to get a clear picture of what you can do, what you will receive, and how an employer must treat you.