Redundancy rights – your job loss questions answered including holiday and maternity pay and benefits


THOUSANDS of people in the UK are set to lose their jobs after a raft of companies announced 12,000 cuts in one day this week.

The redundancies are mainly being made by high street retailers and in aviation – two of the sectors hardest hit by the coronavirus lockdown.

Upper Crust owner SSP Group, Harrods, Airbus and EasyJet have all announced layoffs in recent days.

And that could just be the tip of the iceberg as the full impact of the coronavirus lockdown hits the UK jobs market.

But what are your rights if you are made redundant?

If you have worked for your employer for two years or more, you are entitled to statutory redundancy pay.

This is based on your age, weekly pay and number of years in the job.

The maximum amount of statutory redundancy pay is £16,140, or £16,800 in Northern Ireland.

The government has a calculator on its website to help you work out how much you are owed.

You can’t get less than the statutory amount but you may get more if your employer has a redundancy scheme, and redundancy pay up to £30,000 is tax-free.

When you are made redundant, you are also entitled to any holiday pay you are owed for untaken holiday days at the end of your notice period.

Alternatively, your employer has to let you take the days off before you leave.

However, if you have taken more days than your annual entitlement then your employer is within their legal rights to dock this from your final pay settlement.

If you have been on furlough you will still have accrued holiday days so the same rules apply.

If you are made redundant you won’t automatically get help with your mortgage or rent – but there are steps you can take.

If you are struggling to pay your mortgage, talk to your lender to see if it will help you manage your payments.

Lenders must only use repossession as a last resort and have to prove they have done all they can to help struggling borrowers.

At the moment, repossessions are banned until the end of October.

You can also ask your bank for a three month mortgage holiday – although this should only be used if you’re in desperate need as you could end up with higher repayments over the long term.

The deadline for applying for this sort of payment freeze has been extended until October 31 this year, and we’ve created a guide of how to apply for one here.

Similarly if you think you won’t be able to pay your rent, it is best to talk to your landlord up front.

You might be able to claim Universal Credit housing costs or housing benefit to help pay your rent.

For more help on paying your bills, visit Citizens Advice.

If you are made redundant and your employment ends in or after your “qualifying week”, which is the 15th week before the week your baby is due, you are still entitled to statutory maternity pay for 39 weeks as usual.

Statutory maternity pay is:

You will not get statutory maternity pay if you are made redundant and your job ends before the “qualifying week”.

However, you may be able to claim maternity allowance, which you can do at your local Job Centre.

If you are already on maternity leave and receiving statutory maternity pay when you are made redundant, your maternity leave will come to an end when your employment ends but you will continue to receive your statutory maternity pay for the rest of the 39 week period.

Keep in mind that employers cannot select a woman for redundancy purely because she is pregnant or on maternity leave – this would be unfair dismissal.

You can work out how much maternity pay you might be entitled to online here.

It is a good idea to sign up for Universal Credit as soon as you have confirmation of your redundancy – the money is intended to help with your living costs.

If you have worked and paid enough National Insurance contributions, usually within the last two tax years, you may be able to claim a benefit based on your contributions too.

You do not have to wait until you have used up your redundancy payment to be able to sign on.

Citizens Advice has a benefits checker where you can see what benefits you may be entitled to.

Redundancy payments are taken into account when calculating whether you can receive means-tested benefits.

If your redundancy payment means you have more than £16,000 and you are under State Pension age, then you are not entitled to means-tested benefits (except maybe some council tax support).

If your redundancy payment means you have between £6,000 and £16,000, you may be entitled to means-tested benefits, but it may be lowered.

Pay in lieu of notice and holiday pay are be treated as earnings for Universal Credit in the assessment period in which they are paid – so the amount you receive may change.

Your employer can still make you redundant while you’re on furlough or afterwards.

But your rights as an employee are not affected by being on furlough, and this includes your redundancy rights, so you are still entitled to the same financial help.

First, check what kind of pension you’ve got: you will need to decide whether to leave it where it is or transfer it somewhere else.

In most cases, you can either leave your pension in your existing scheme and when you retire you will receive a pension from that scheme.

Or you can transfer your pension contributions into your own personal pension.

In some cases, you can move your pension into a new employer’s scheme, if it will allow you to.

The Money Advice Service has more useful information on pensions here.

Here’s all you need to know about whether you can be furloughed or get sick pay if your area goes back into lockdown like Leicester.

And if your finances have been hit by coronavirus, here are 21 ways to try and fix them.

Here’s how you should use your credit card if you have been financial affected by coronavirus.


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