Question 1

Can I be made redundant while on sick leave?

Accepted Answer

Yes, you can be made redundant while on sick leave. However, your employer must still follow a fair redundancy process, including consulting with you (they may need to make reasonable adjustments to how they consult with you). If you are selected because of an absence related to a disability, this could be disability discrimination.

Question 2

Is redundancy pay taxable in the UK?

Accepted Answer

Statutory redundancy pay is completely tax-free. In fact, the first £30,000 of your total redundancy payment (statutory plus any enhanced redundancy pay) is exempt from tax. However, notice pay (PILON) and holiday pay are subject to normal tax and National Insurance deductions, even if paid at the same time.

Question 3

Can my employer make just me redundant?

Accepted Answer

Yes. If your specific role is no longer needed, your employer can make just you redundant without putting you in a 'pool' with others. This is common when a business drops a specific product line or service. They must still consult with you individually before making a final decision.

Question 4

What happens to my pension if I am made redundant?

Accepted Answer

Your employer's contributions will stop when your employment ends. The pension pot you have built up belongs to you. You can usually leave it where it is, transfer it to a new employer's scheme, or transfer it to a personal pension. If you are 55 or older, you may be able to start drawing from it.

Question 5

How long does redundancy consultation have to be?

Accepted Answer

If fewer than 20 employees are being made redundant, there is no fixed legal timeframe, but it must be 'meaningful' (typically at least a week or two). If 20 to 99 employees are affected, consultation must start at least 30 days before the first dismissal. For 100 or more employees, it must be at least 45 days.

Question 6

Can I be made redundant while pregnant?

Accepted Answer

Yes, but you have special protections. From April 2024, the Protection from Redundancy (Pregnancy and Family Leave) Act means that if you are pregnant (and have informed your employer), you must be offered any suitable alternative vacancy over other employees who are not on protected leave. Selecting you because you are pregnant is automatically unfair dismissal and discrimination.

Question 7

What is a settlement agreement?

Accepted Answer

A settlement agreement is a legally binding contract where you agree to waive your right to bring employment claims (like unfair dismissal) against your employer, usually in return for a financial payment. You must receive independent legal advice for it to be valid, and your employer usually pays the legal fee for this advice.

Question 8

Do I have to accept voluntary redundancy?

Accepted Answer

No, you do not have to accept voluntary redundancy if it is offered. However, if your employer still needs to reduce headcount, they may proceed to compulsory redundancies, and you could ultimately be selected anyway, potentially with a less generous financial package than the voluntary offer.

Question 9

What is TUPE?

Accepted Answer

TUPE stands for Transfer of Undertakings (Protection of Employment). If the business you work for is sold, or the service you provide is outsourced, your employment automatically transfers to the new employer on your existing terms and conditions. You cannot be made redundant simply because of the transfer, though there are exceptions for economic, technical, or organisational reasons.

Question 10

Can my employer give me a bad reference after redundancy?

Accepted Answer

An employer does not have to provide a reference, but if they do, it must be accurate, fair, and not misleading. They cannot give a deliberately bad reference out of spite. Often, part of a settlement agreement involves agreeing on the exact wording of a reference that your employer will provide.

Question 11

Is my non-compete clause enforceable?

Accepted Answer

It depends. Non-compete clauses are only enforceable if they are reasonable in scope, duration (usually maximum 6-12 months), and geographical area, and are strictly necessary to protect a legitimate business interest. Courts often strike them down if they are drawn too widely. A solicitor can review yours to advise.

Question 12

What is PILON?

Accepted Answer

PILON stands for Pay In Lieu Of Notice. It means your employer pays you the money you would have earned during your notice period, but your employment ends immediately and you do not have to work your notice. PILON is fully taxable, unlike the first £30,000 of redundancy pay.

Question 13

What is garden leave?

Accepted Answer

Garden leave is when you serve out your notice period, remaining employed and fully paid, but your employer tells you not to come to the office or do any work. During this time, you cannot start a new job or contact clients, as you are still technically an employee.

Question 14

How do I appeal my redundancy?

Accepted Answer

Your employer should give you the right to appeal in your redundancy confirmation letter, including a deadline (often 5 working days). You should write a formal letter setting out why you believe the redundancy is unfair (e.g. unfair selection criteria, lack of consultation). The appeal must be heard by someone not previously involved in the decision if possible.

Question 15

Can I negotiate my redundancy package?

Accepted Answer

Statutory redundancy pay is fixed by law, but if your employer is offering enhanced pay or a settlement agreement, you can and often should negotiate. You can negotiate the payout amount, reference wording, leaving date, and whether you keep company property like a laptop.

Question 16

What is ACAS Early Conciliation?

Accepted Answer

ACAS Early Conciliation is a mandatory step before you can take an employer to an Employment Tribunal. It is a free service where an independent conciliator tries to help you and your employer reach a settlement to avoid a tribunal hearing. You must start this process within 3 months less one day of your employment ending.

Question 17

How long do I have to claim unfair dismissal?

Accepted Answer

You have strict time limits. You must start the ACAS Early Conciliation process within 3 months less one day from the date your employment ended (your effective date of termination). If you miss this deadline, it is almost impossible to bring a claim.

Question 18

Can I be made redundant on a zero hours contract?

Accepted Answer

Yes. However, you only qualify for statutory redundancy pay if you have been continuously employed for two years or more. If you are, your weekly pay is calculated as an average of your earnings over the 12 weeks before your notice was given.

Redundancy FAQs — 18 Common Questions Answered

Pay and Tax

Special Circumstances

Process and Rights

Settlement Agreements