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Coronavirus (COVID-19) – Redundancy

Last updated: 19 Mar 2021

*PLEASE FOLLOW ANY GOVERNMENT GUIDANCE OR GUIDANCE SPECIFIC TO YOUR LOCAL AREA AS GUIDANCE ON THE CORONAVIRUS (COVID-19) IS CHANGING DAILY*

You might also want to look at our coronavirus pages on:

The redundancy process

I’ve already been made redundant. Can I be rehired and put on furlough?

You can be re-employed and put on the furlough scheme if your employer agrees, provided you were on the payroll on September 23 2020 if you have since been made redundant or stopped working for your employer. The government guidance states that your employer will need to have made a PAYE RTI submission for you between 20 March and 30 October 2020.

You should approach your employer to ask if they will consider rehiring and furloughing you. If the circumstances may change that give a real possibility your role will return by March they may agree.  However, it may be that your employer will be reluctant to do so as this does result in an additional cost to the employer of NICs and pension contributions. If they have already made redundancy payments and notice pay they may not want to re-employ former employees if at the end of the furlough scheme, the economic outlook has not improved and the role is again redundant.

My employer says they need to make me redundant. What can I do?

If you have been notified you are at risk of redundancy or are in the process of a redundancy consultation you can ask your employer to put you on furlough under the extended Coronavirus Job Retention Scheme (CJRS or Furlough). Under the extended scheme you can be furloughed even if you haven’t been furloughed before.

See our Furlough FAQs for more information and the updated guidance for the extended furlough scheme. The extended scheme will remain open until September 2021. For claim periods running to January 2021, under the extended scheme employees will receive 80% of their usual salary for hours not worked, up to a maximum of £2,500 per month. The £2,500 cap is proportional to the hours not worked.

WHAT IS REDUNDANCY?

Redundancy is a form of dismissal from your job. It usually happens when employers need to reduce their workforce.

Redundancy is one of five potentially fair reasons for an employer to dismiss an employee.

To see if the redundancy is fair, you should think about:

  1. if there was a genuine redundancy situation;
  2. if your employer followed a fair redundancy process; and
  3. if your employer considered alternatives to redundancy including appropriate alternative roles before making you redundant. 

We’ve outlined the process that your employer has to follow in more detail in the questions below, tailored to the coronavirus crisis. You can also see our general page on redundancy for more information, and what to do if you are under threat of redundancy.

If you find yourself in a situation where you are made redundant, you should receive redundancy and notice pay even if your employer followed a fair process (provided you have worked for your employer for long enough). You may also be eligible for certain benefits. We have a specific website page on financial support for families whose income is affected by coronavirus.

What process does my employer have to follow when making redundancies?

In order for the redundancy to be lawful, there needs to be a genuine redundancy situation, and your employer needs to follow a process that uses fair selection criteria to decide which employees to make redundant.

If your employer is proposing to dismiss 20 or more employees at one establishment within 90 days or less, this triggers the duty to follow the rules around collective consultation. This most usually arises where redundancies are being proposed. See redundancy pages for more information on what to do if you are at risk of redundancy.

Is there a genuine redundancy situation?

Redundancy can happen for one of three reasons:

  1. your place of work closes or moves, either temporarily or permanently;
  2. the type of work you do will no longer be done at your place of work; or
  3. fewer employees are needed to do the particular type of work that you do.

If there is not a genuine redundancy situation, then this might be unlawful. For example, if you are returning from maternity leave and your employer says your role is being made redundant, but you find out that they are keeping your maternity cover, then your role is not genuinely redundant and you are likely to have claim(s) against your employer.

Has your employer followed a fair redundancy process?

Assuming there is a genuine redundancy situation (where the collective consultation rules do not apply) your employer will still need to follow a fair process. It’s good practice for your employer to inform all employees that there is a risk of redundancy and why, and that those at risk of redundancy will be consulted.

If the proposal is to dismiss 20 or more employees at one establishment, the rules on collective consultation will be triggered. These are complex and summarised in our Redundancy pages.

Next, assuming the collective consultation rules do not apply, your employer should identify an appropriate “pool” or group of employees for redundancy. For example, if you work in an office and there are 5 of you doing secretarial work but there is only enough work for 2 people, all 5 of you should be placed in the “pool”. 

Your employer should consult with all individuals in the pool who may be at risk of redundancy. This will usually mean having an individual meeting with each person in the pool. In the meeting, your employer should explain who is in the pool, why there is a risk of redundancy, and the process going forward.

You can ask to bring someone with you to your consultation meeting, like a colleague or a member of HR. It is good practice for your employer to allow you to bring someone to this meeting. If your employer has concerns about this request, you can reassure them that the person is only there to take notes and offer moral support. You should also check your employer’s policies, in case they cover this. If you have a disability, being accompanied to your consultation meeting may also be considered a reasonable adjustment that your employer has to make for you.

Once you have been consulted, your employer should use measurable, objective criteria to decide which employees to make redundant.

Potential selection criteria could be:

  • Skills, knowledge and experience
  • Performance records – if your employer can show how they’ve measured it, for example through annual appraisals
  • Disciplinary record
  • Attendance record – where attendance is used it is important that the reasons for poor attendance are examined. For example, your employer needs to be careful not to discriminate on the grounds of sex, pregnancy or disability.
  • Length of service – this is not generally used these days because of the risk of age discrimination, but is sometimes still used as a tie-breaker.

The scoring should not be based on personal opinion. Ideally, there should be more than one person scoring but this might not always be possible. Your employer should assess how important each of the criteria are to the decision about who to make redundant.

If an employer scores you negatively in a redundancy selection based on having to be furloughed or take leave for childcare responsibilities or because your performance has been affected by your children being at home, you should challenge this.

Similar to the above point, if you are a woman, this could amount to indirect discrimination if your employer is treating you negatively due to the fact that you have child care responsibilities.

You should request that your employer discounts any leave related to childcare in a redundancy selection, to avoid being indirectly discriminatory towards women.

Throughout the process, your employer must consider what you have to say, but this does not mean they have to agree with you.

Your employer will usually give you a score based on one or more measurements, then choose the people with the lowest scores for redundancy. They should:

  • tell you in advance how they’ll choose and score you
  • score everyone in the pool using the same method
  • show you your scores (though they don’t have to show you anyone else’s scores)
  • only choose the people with the lowest scores for redundancy

If the whole business is closing, or the employer is closing down a whole section of a company, then the employer should select all those employees in that part of the business as “at risk”. In these circumstances they would not need to use the selection criteria above because they are making everyone in that part of the business redundant.

In certain circumstances, there may be a genuine redundancy situation, but the selection criteria used for redundancy is automatically unfair. For example, it is automatically unfair to select an employee for redundancy for any reason connected to pregnancy, disability or another ‘protected characteristic’. If your employer selects you for redundancy because of these reasons, you may be able to make a claim for discrimination and potentially unfair dismissal. 

If you are on maternity, adoption, shared parental or paternity leave and your employer is making employees redundant, you have extra protection in a redundancy situation.

If you have been scored negatively for performance due to childcare needs during the pandemic and you are a woman you may be able to claim indirect discrimination in these circumstances due to the fact that your employer’s practice of requiring full performance and full-time working put you at a disadvantage compared to others without childcare responsibilities. A discrimination claim could potentially be brought if your employer was to dismiss you or if you received a disciplinary warning falling short of dismissal.  There is no qualifying service required to bring a claim for discrimination.  Your employer could defend a discrimination claim by showing that the practices of requiring full performance and full-time working in these circumstances were objectively justified, but again this may be difficult giving the short term nature and circumstances impacting on your performance.

Has your employer considered alternatives to redundancy, including if you could do an alternative role?

As part of the redundancy procedure, your employer must consider if there are alternatives to redundancy. Some employers believe there is no alternative to redundancy to overcome economic difficulties, however sometimes the workforce and skillset can be preserved if proper alternatives to redundancy are explored.

As part of your consultation you can suggest alternatives to redundancy including using the furlough scheme, reducing hours and reducing remuneration or allowing temporary stoppages.

Your employer should also consider if there is another role that you could do. Your employer does not have to create an alternative role for you if there is not already one available.

If your employer offers you a suitable alternative role and you reject it, you will lose your right to a redundancy payment.  For the role to be suitable, the employer would have to consider:

  • the nature of the job offered (status, content and terms, especially wages, hours and location); and
  • the employee in question (whether the job a is a match for the individual)

If you are unsure about accepting an alternative role that is offered to you, you can agree to a trial period for up to 4 weeks without putting at risk your right to a redundancy payment. If you decide during the trial period that the job is not suitable, you still have a right to a redundancy payment.

If your employer does not offer you a suitable alternative role even though there is one available, you could have a claim for unfair dismissal

If there are no suitable alternative roles, and you are made redundant fairly, you will still be entitled to redundancy and notice pay (provided you have worked for your employer for long enough). See the question on redundancy and notice pay below for more information.

If you are under threat of redundancy, please see our webpage on the practical steps you can take.

Does coronavirus change the redundancy process?

You are still entitled to the same redundancy rights as you normally are, even during the coronavirus crisis. This includes your right to redundancy pay and notice periods. But your employer might adopt a more streamlined process.

If your employer goes ahead with the redundancy, they still have to follow a fair process, consider alternatives to redundancy and look for suitable alternative roles.

Your employer might have to make some changes to the redundancy process because of COVID-19, for example consultation may have to take place virtually over the phone or using video technology rather than face-to-face.

Employers may have to adapt their selection criteria to remain fair. For example, if your employer selects you for redundancy purely based on the fact you are on furlough, this is likely to be unfair. Using the usual selection criteria (e.g. measuring performance) may also be unfair if some of the workforce has been off work for the last few weeks/months for childcare, caring responsibilities, or shielding reasons or some of the workforce is on furlough. Performance indicators should normally be applied to employees for the same period. So if some employees are off work during coronavirus and some are not, your employer should use the period before the coronavirus crisis to assess performance.

If your employer fails to follow the correct procedure or does not use fair selection criteria, then you may be able to bring an unfair dismissal claim in the Employment Tribunal.

Can I volunteer to be made redundant?

Employers may ask for volunteers for redundancy. If your employer asks for volunteers, you can volunteer. But in the end, it is up to your employer whether they actually select you for redundancy, so volunteering does not necessarily mean you will be made redundant.

My employer wants to reduce my hours to make me part-time. Can I ask to be made redundant instead? 

Yes, you can potentially ask to be made redundant. However, your employer does not have to agree to your request.

To make you redundant, there should be a genuine redundancy situation. This happens for one of three reasons:

  1. your place of work closes or moves (this can be temporary or permanent)
  2. the type of work you do will no longer be carried out at your place of work
  3. fewer employees are needed to do the particular type of work that you do

If your employer wants to reduce your hours permanently, this might be covered by reason 3 – fewer employees are needed to do your type of work. You could point this out to your employer, ask them to start a redundancy process, and volunteer for redundancy.

Your employer should follow a fair redundancy process – there is more information on this on our redundancy webpage. For example, your employer should not be reducing your hours for a discriminatory reason. This page also include information on the payment you should receive after being made redundancy. If you are considering asking to be made redundant, you should work out what payments you could be eligible for on redundancy.

If you were previously on furlough or are returning from family leave, flexible furlough may be a good solution for you. From 1 July, you have been able to be furloughed part-time (and work the rest of the time). You would be paid in full for the hours you work, and your employer could claim the 80% furlough grant for the hours you don’t work. You don’t have a right to be flexibly furloughed – your employer can refuse, take you off furlough, and only pay you for your part-time hours. But you can ask them to flexibly furlough you, pointing out that they do not have to contribute to the 80% furlough pay under the extended furlough scheme in place from 1 November.

As part of a redundancy process, your employer should consider ‘suitable alternatives’. If your employer does not have enough money to pay you for full-time work, then you could argue there is a redundancy. You can say that part-time furlough would be a ‘suitable alternative’ that your employer should consider instead of taking you off furlough entirely and only paying you your part-time wages. There is more information on flexible furlough on our webpage

Changes to your employment contract usually have to be agreed between you and your employer. Moving you from full time to part-time permanently may be a change to your employment contract, if it specifies your hours. If you object to the reduction in your hours, then you should make this clear to them. If you continue to go to work, you should say that you are doing so under protest, and that you do not accept the proposed changes. We have a sample letter of protest that you can use. You could try to negotiate a more acceptable change with your employer, for example, that gives you enough hours or a suitable shift pattern. You could also suggest a trial period to your employer, to see how well your proposed arrangement works.

There is more information on our advice pages here:

If your workplace has a collective agreement, they may be able to agree to a change on your behalf. You should seek further legal advice if this is the case.

Asking your employer’s permission to take a second job is another potential alternative to asking to be made redundant. This would help you avoid a reduction in your income, and allow you to keep your current job.

If you have been laid off or on reduced hours for a certain amount of time, you may be able to apply for redundancy. This will apply if you have been laid off without pay, or put on reduced hours and receiving less than half a week’s pay, for:

  • 4 or more weeks in a row
  • 6 or more weeks in a 13-week period.

If this applies to you, you can write to your employer to claim redundancy within 4 weeks of the last day of the time period described above. There is more information on this process on the government’s website.

If you definitely want to leave your job, you can resign. If you resign, you will need to give your employer notice. You will receive your pay during your notice period, but you will not receive a statutory redundancy payment.

If you are dismissed or if you resign, you may be eligible for financial support. There is more information on the financial support available to parents and carers on our financial support FAQs.

Can I sign away my redundancy rights, for example, in my furlough agreement? 

It depends on what the agreement says, the right in question, and how long you’ve worked for your employer. But usually, you cannot sign away statutory rights including your right to a redundancy payment, or right not to be unfairly dismissed.

Your right to a fair redundancy process

Employers have to follow a fair redundancy process before making employees redundant. There is a lot more information in the question above on fair process.

Even if you have agreed that you could be made redundant at the end of the furlough period, your employer should still have to follow this process. It will depend what the agreement says, and whether it is reasonable.

One aspect of a fair redundancy process is that your employer has to search for alternatives to redundancy, including alternative roles which you could do. If an alternative role is available, then it should be offered to you and you should not be made redundant. The search for an alternative role should continue throughout the redundancy process – so it may be unreasonable for your employer to say you will be made redundant months before the actual date of the redundancy as there may be alternative roles becoming available in between those two dates. Also remember that during this time, you can make suggestions to your employer to try to avoid redundancy, such as offering to reduce your hours or pay.

Your right to be protected from unfair dismissal

Employees with at least two years of service have a statutory right not to be unfairly dismissed. This means that if your employer fails to follow a proper redundancy process, you may be able to bring a claim for unfair dismissal. You can only sign away your right to bring an unfair dismissal claim if you enter into a settlement agreement called a compromise agreement meets certain legal requirements, or if you sign a COT3 form issued by ACAS.

Employees with less than two years of service do not have protection against unfair dismissal where the reason for dismissal is redundancy. However, if you are selected for redundancy for a discriminatory or automatically unfair reason (including dismissal because you have taken time off for dependants) then you could still have a claim against your employer. You cannot sign away your right to be protected against discrimination.

There is more information about unfair dismissal on our webpage on this topic. 

Your right to redundancy pay

Employees with at least two years of service have a right to receive a statutory redundancy payment on redundancy. You cannot sign away your right to receive statutory redundancy pay. To work out how much statutory redundancy pay you may be entitled to, you can use the government’s calculator.

Employees with less than two years of service are not entitled to statutory redundancy pay.

If you are entitled to contractual redundancy pay in your contract, then you could have waived that entitlement when you signed the furlough agreement with the relevant wording included. However, you should check the exact wording of the furlough agreement and your contract.

Redundancy, notice and holiday pay

What pay should I be entitled to if I am made redundant?

If you are made redundant, you will be entitled to:

  1. Redundancy pay
  2. Notice pay
  3. Accrued annual leave that you have not yet taken

Whether or not you receive redundancy pay and notice pay usually depends on how long you have worked for your employer. Your contract might also give you more than the legal minimum – you should always check your contract to see what it says.

1. Redundancy pay 

You will be entitled to statutory redundancy pay if you have been employed by your employer for at least 2 years and you have been made redundant. The amount this will depend on how much you earn a week, how old you are and how many whole years you have worked for your employer. You can use the government calculator to calculate your redundancy pay.

Your employer may also offer you contractual redundancy pay (more than the statutory minimum). You should check your contract to see what it says about redundancy and pay. 

2. Notice pay 

The law states that employees must be given one week’s pay for each year of continuous employment, up to a maximum of 12 weeks. This is known as the statutory minimum period of notice.  For example, if you have been working for 2 full years, you will be entitled to 2 weeks statutory notice. If you’ve worked for 5 years, you’ll get 5 weeks’ notice. The maximum is 12 weeks so even if you’ve worked 14 years, you will only get 12 weeks’ notice.

Remember, your employment contract may always offer you more than the legal minimum set out above. You should check your contract to see what it says about redundancy and notice pay.

3. Pay for accrued annual leave/holiday that you have been unable to take

If there is annual leave that you were not able to take before the end of your notice period, you have the right to be paid for this holiday, even if you cannot take it. For example, if you have 2 weeks of holiday left to take by the time that your notice period ends, you are entitled to 2 weeks’ pay on top of your notice pay and redundancy pay.

Read our general redundancy page (not coronavirus-specific) for more information if you are not sure how much annual leave you should be paid for. The relevant question on this page is what payment you should receive if you are made redundant.

If you are made redundant while you are on furlough, your notice pay might be calculated differently. Read the question on redundancy and notice pay during furlough below for more information.

Furlough and redundancy

If my employer could have put me on furlough instead of making me redundant, is this lawful?

It really depends on the circumstances. You cannot force your employer to put you on furlough, just as they cannot force you to accept furlough. Both parties need to agree.

If your employer makes you redundant when they could have put you on furlough at no great additional cost (meaning that you have agreed to cut down your pay to the 80% reimbursed by the government) and they are able to continue to pay National Insurance Contributions and pension, in our view, depending on the timing of your redundancy process you could argue unfair dismissal (if you have 2 years of service – see our page on redundancy and our page on unfair dismissal). It will depend on the circumstances and whether there is a real chance your job will be expected to be viable once the extended furlough period comes to an end.  It may now be seen as reasonable to make you redundant if your employer believes that there will be a redundancy situation at the end of the extended furlough period or if they cannot afford to pay the contribution required towards the furlough scheme.  

An Employment Tribunal will look at the employer’s resources at the time, but if they had no cashflow issue (or if you had agreed to delay receiving your salary because your employer did not have the funds to pay you for now), if your job is viable, it seems that making you redundant when they could instead have put you on furlough could be unreasonable. However, as we now know the furlough scheme is likely to end at the end of this extended phase, employers may decide have little choice but to start redundancy procedures now.

You may also be able to make a discrimination argument if you think they’ve made you redundant (instead of keeping you furlough) because of your sex or other protected characteristic.

If you are under threat of redundancy, please see our webpage on the practical steps you can take.

If I am made redundant while I am still on furlough, how should my redundancy pay be calculated?

1. Redundancy pay while on furlough

Your redundancy pay is not affected by being on furlough. If you are made redundant while you are furloughed, your redundancy pay will be calculated using the amount you earned before you were furloughed (or what you would have been earning had you not been on furlough). You should receive 100% of the redundancy pay you are entitled to, even if you agreed to a pay cut as part of your furlough agreement. But you may get less than 100% of your notice pay (see more in point 2 below).

You will be entitled to statutory redundancy pay if you have been employed by your employer for at least 2 years and you have been made redundant. This amount will depend on how much you earn a week, how old you are and how many whole years you have worked for your employer. You can use the government calculator to calculate your redundancy pay.

Your employer may also offer you contractual redundancy pay (more than the statutory minimum). You should check your contract to see what it says about redundancy and pay. We have more information on our redundancy page. 

2. Notice pay while on furlough

Whether or not you are entitled to be paid your notice pay at your normal pay rate or your furlough pay rate depends on your individual circumstances. The rules differ according to whether you are only entitled to statutory notice (the amount of notice the law says you must be given) or contractual notice (the amount of notice your employer agrees to give you in addition to the statutory notice).

Statutory minimum notice is one week’s notice for each year of continuous employment, up to a maximum of 12 weeks. For example, if you have been working for 2 full years, you will be entitled to 2 weeks statutory notice. If you’ve worked for 5 years, you’ll get 5 weeks’ notice. The maximum is 12 weeks so even if you’ve worked 14 years, you will get 12 weeks’ notice.

Statutory Notice

If you are only entitled to statutory notice (or less than one week more than the statutory notice period) from your employer, your notice pay should be based on your full salary, not your furlough salary.   

Since 1 December 2020, Employers are no longer able to make a claim for furlough pay for any period of notice.  Your employer cannot claim for your statutory redundancy pay through the furlough scheme.

Contractual Notice

If your contract gives you at least one week more than the statutory notice period, your notice pay will depend on your furlough agreement with your employer. If you agreed to receive less than 100% of your pay while you are on furlough, and you remain on furlough for your entire notice period, then your notice pay will be paid at the same rate as your furlough pay. If your furlough period comes to an end before your notice period has run out, and you do not agree to continue with furlough, then you will be entitled to 100% of your pay for the remainder of your notice period that you are not on furlough. 

These rules only apply to those with normal working hours. If you do not have normal working hours or your pay varies with the amount of work done, it can be quite complicated to work out what one week’s pay is. You should seek further advice if that is the case.

Negotiating your notice pay with your employer: if your employer asks you to accept redundancy while you are on furlough, they may ask you to sign a settlement agreement. As part of this agreement, you can negotiate with your employer and say that you would accept redundancy only if they pay you your full pay (instead of your furlough pay) for the whole notice period. In reality, this is a negotiation – it’s best to keep discussions as constructive and amicable as possible. To sign a settlement agreement, you have to get legal advice (which your employer would usually pay for) – you can ask the lawyer to help you with this negotiation.

3. Pay for accrued annual leave/holiday that you have been unable to take

If there is annual leave that you were not able to take before the end of your notice period, you have the right to be paid for this holiday, even if you cannot take it. For example, if you have 2 weeks of holiday left to take by the time that your notice period ends, you are entitled to 2 weeks’ pay on top of your notice pay and redundancy pay.

Read our general redundancy page (not coronavirus-specific) for more information if you are not sure how much annual leave you should be paid for. The relevant question on this page is what payment you should receive if you are made redundant.

If I take part in the consultation process, will this end my furlough leave?

No. To be eligible for furlough leave, you cannot undertake work for, or on behalf of your employer. But taking part in the consultation process will not end furlough leave.  

Family-related leave and redundancy

What if I am on maternity, adoption, shared parental or paternity leave?

If you are on maternity leave, adoption leave, paternity leave or shared parental leave and you are at risk of redundancy, you have special protection. You have an automatic right to be offered any suitable and appropriate vacancy (where one is available) before it is offered to any other employee (even if they are also at risk). We have a separate page on redundancy if you are on maternity, adoption, shared parental or paternity leave which you can read for more information.

If you are made redundant and your employment ends on or after the qualifying week (the 15th week before your baby is due), you will still be entitled to SMP for 39 weeks. This is in addition to any Statutory Redundancy pay you may be entitled to.

If you think the redundancy is not fair

What do I do if I don’t think my employer has followed a fair process, or I don’t think there is a genuine redundancy?

If your employer has not followed a fair process, or the redundancy is not genuine, you may have a claim for unfair dismissal. In order to claim unfair dismissal, you must (almost always) have worked for your employer for at least two years.  If you don’t have two years’ service, unfortunately you won’t be able to claim unfair dismissal, even if your employer did not follow the process correctly.

In some situations, you do not need 2 years of service with an employer to claim unfair dismissal. If the dismissal is automatically unfair (for example if you have been selected for redundancy because you are pregnant or on family-related leave), you can bring a claim against your employer regardless of how long you’ve worked for them. 

If you feel you have been unfairly dismissed or discriminated against, you should consider raising a grievance and/or starting an employment tribunal claim.

There are strict deadlines for making claims so you should not delay in doing this. You should seek legal advice if you are considering bringing a claim.

My employer is insolvent and has made me redundant but has not paid me. What are my rights?

If your employer is insolvent or cannot pay you then you can apply to the National Insurance Fund for unpaid “employer’s payments”. This will cover your statutory redundancy payment and certain other sums due under your employment contract such as holiday pay, outstanding payments like unpaid wages, overtime and commission and money you would have earned working your notice period (‘statutory notice pay’).

You’ll get up to 8 weeks of money you’re owed. Payments for wages and other money you’re owed are capped at £538 a week (£525 if you were made redundant before 6 April 2020). If your employer is insolvent, you may be able to make a claim to the employment tribunal for compensation if you were unfairly dismissed and/or if there was a failure to collectively consult about your redundancy for a protective award. Your claim in these circumstances would be against both the Secretary of State for Business, Energy and Industrial Strategy and your former employer.


What should I do if I think my employer has discriminated against me in the redundancy process?

If you feel you were selected for redundancy or not chosen for a role that was suitable for a discriminatory reason, for example, because you are female, pregnant, on family-related leave or because of another protected characteristic (race, sexual orientation, gender reassignment, marital status, age, disability, religion or belief) then you may have a claim for discriminatory dismissal. In this case you will not need two years’ service to bring a claim. 

You should seek advice if you believe that you may have been made redundant unfairly.  There are strict deadlines for making claims so you should not delay doing this. 

Settlement agreement

Why is my employer asking me to sign a settlement agreement?

Many employers, when making large scale redundancies, want to close off the possibility of employees bringing employment tribunal claims even when they have complied with a full and proper redundancy process. Asking you to sign an agreement doesn’t mean there is something sinister going on.

There is a legal requirement for you to get advice from a solicitor or trade union representative before signing a settlement agreement so you should discuss any concerns with them before signing. Once you sign a settlement agreement, you will not be able to bring a claim in the employment tribunal against your employer.

You should seek advice if you believe that you may have been made redundant unfairly. There are strict deadlines for making claims so you should not delay doing this. 

Redundancy because of insolvency

My employer is insolvent and has made me redundant but has not paid me. What are my rights?

If your employer is insolvent or can’t pay you then you can apply to the National Insurance Fund for unpaid “employer’s payments”. This will cover your statutory redundancy payment and certain other sums due under your employment contract such as holiday pay, outstanding payments like unpaid wages, overtime and commission and money you would have earned working your notice period (‘statutory notice pay’).

You’ll get up to 8 weeks of money you’re owed. Payments for wages and other money you’re owed are currently capped at £538 a week (£525 if you were made redundant before 6 April 2020). If your employer is insolvent, you may be able to make a claim to the employment tribunal for compensation if you were unfairly dismissed and/or if there was a failure to collectively consult about your redundancy for a protective award. Your claim in these circumstances would be against both the Secretary of State for Business, Energy and Industrial Strategy and your former employer.

How to apply for money owed in insolvency

You can apply for redundancy pay, unpaid wages and holiday pay as soon as you’ve been made redundant. The person dealing with the insolvency (the ‘insolvency practitioner’ or ‘official receiver’) will give you a ‘CN’ (case reference) number. You cannot claim without the CN number.

You must apply for redundancy pay within 6 months of being dismissed.

The application will ask if you want to apply for statutory notice pay. Choosing ‘Yes’ does not mean you’ve applied. You’ll be told when to apply. You can apply for redundancy, unpaid wages and holiday online.

Claiming for loss of notice pay (‘statutory notice pay’) You need an ‘LN’ reference number to make a claim. It’ll be sent after your notice period would have ended. This is usually no more than 12 weeks after you’re dismissed. You must apply for redundancy first – even if you’re not owed any money. Once you have the LN reference number, claim online for loss of notice.

Money you get (or could have got) by claiming benefits will be deducted from your payment. Contact the Redundancy Payments Service if you have queries about completing the online forms. You’ll need your case reference number or National Insurance number.


This advice applies in England, Wales, Scotland and Northern Ireland. If you live in another part of the UK, the law may differ. 

If you have further questions and would like to contact our advice team please use our advice contact form below or call us.

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The information on the law contained on this site is provided free of charge and does not, and is not intended to, amount to legal advice to any person on a specific case or matter. If you are not a solicitor, you are advised to obtain specific legal advice about your case or matter and not to rely solely on this information. Law and guidance is changing regularly in this area.