The number of people made redundant since the start of the
recession in the UK is estimated at 1.31 million, and many of those who were
made unemployed are still searching for a job. Despite signs of economic
recovery, thousands of us are still threatened by redundancy - but what exactly
would the big R mean for you?
The basics: As many experts have pointed out since the
beginning of the economic crisis, people are not made redundant – jobs are. Employees
face redundancy only when the job that they occupied is rendered unnecessary,
either by technological developments or by their business cutting costs or
going into liquidation.
The process: If you are made redundant then your employer
may offer you a range of options. Most employees work out their leave, but
sometimes circumstances may make it necessary for you to be offered pay in lieu
of notice. It’s a good idea to have a look at your contract, which should state
the compensation due to you in event of redundancy and the responsibilities
both on your behalf and on that of your employer.
The legalities: By law, your employer is required to provide
you with a written explanation before making you redundant. They are also
obliged to schedule a meeting with you and a representative in order to discuss
the redundancy. If you feel that the circumstances surrounding the dismissal
are unfair then you are permitted to contest it and your company must hold an
appeal.
The financial side: Most people fear the financial side of
redundancy more than any other aspect – but in reality redundancy pay and state
benefits should provide you with a basic safety net. Anybody with more than two
years of service under their belt is entitled to a redundancy payoff, which is
set at a legal minimum of two weeks for every complete year of service. Many
employers will offer more.
Bridging the gap: Job-seekers’ Allowance is available
immediately to redundant workers, and some people will also qualify for housing
benefit. If you think that your job is at risk then it could also be worth
taking out income protection insurance, which will cover major financial
commitments. Finally, you could consider taking out a long term loan to pay for
basic living costs until you secure a new job. High street banks such as Santander
offer a range of loans at a low rate of
interest.
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