REDUNDANCY

Redundancy can happen to anyone in employment at any time, sometimes quite unexpectedly. It brings shock and a sense of rejection, and can cause considerable emotional and financial stress in the family. After talking it over with a CAB adviser, the following notes may help you and, of course, we are always happy to discuss any of these points in more detail.

Redundancy is a form of dismissal. It occurs when an employer decides s/he needs fewer employees in the business or organisation. It is a potentially fair reason for dismissal.

Legislation sets out that a dismissal will be a redundancy if:-

• The employer's business, or part of the business, has ceased to operate; or
• The employer's business has moved to a different place; or
• The business's need for work of a particular type to be done has ceased or diminished.

Examples of when an employee may be made redundant include:-

• The work the employee does is no longer needed
• The employee's job no longer exists because her/his work is being done by other employees
• The employee has ceased trading but is not insolvent
• The employer's business, or the work the employee is doing, moves to another area
• The employer needs fewer employees to carry out the work the employee is doing, although the level of work remains the same
• The employer's business becomes insolvent
• The employer was the sole proprietor of the business and the employer dies.

When you are made redundant...

You may be entitled to a redundancy payment from your employer. The amount depends on how much you are paid, your age and the length of time you have worked for your employer. Employees must have worked for at least 2 years. If your employer cannot pay due to insolvency, you may still be able to claim from the National Insurance Fund. Redundancy pay is not normally taxed and will not affect any contribution-based Job Seekers Allowance you may receive.

Every dismissed employee, whether entitled to a redundancy payment or not, is entitled to a certain period of notice from his/her employer. Often a redundant employee will receive payment in lieu of notice. Tax and N.I. contributions are not normally deducted from these payments. Your own contract should tell you what period of notice to expect, but there is also a minimum laid down by statute. You may also be entitled to some holiday pay.

Before leaving your job, you should...

CHECK your redundancy payment is correct. If you have problems, consult your Union representative, personnel office or CAB

ASK about any occupational pension rights or other payments. After you have left work...

JOB SEEKERS ALLOWANCE If you are unemployed, you should make a claim for Job Seekers Allowance at the Job Centre Plus in Horsham on the first day you are out of work. If necessary, bring the form to the CAB for help in completing it.

The Job Centre Plus will ask you to attend for an interview. You will have to complete a Jobseekers Agreement and discuss what work you are seeking and are available for. You will thereafter be required to sign on, normally each fortnight and demonstrate what action you are taking to find employment. If you live more than 1 hour's journey by public transport you may be allowed to sign on by post.

Your benefit will be sent fortnightly, backdated to when you first claimed. Any pay in lieu of notice, holiday pay or contractual redundancy payments may affect the starting date, but not statutory redundancy pay, which will be treated as capital.

There are 2 kinds of Job Seekers Allowance:-

• Contribution based JSA - replaces contributory Unemployment Benefit.
• Income based (means tested) JSA - replaces Income Support for unemployed people who have to sign on as available for work.

If you are not entitled to contributory JSA or if your contributory JSA is not enough to live on (and your partner works less than 24 hours per week) you can claim income-based JSA for yourself and your family.

HOUSING BENEFIT & COUNCIL TAX BENEFIT

If you are not entitled to Job Seekers Allowance and your savings are not over £16,000 you may be able to get financial help with rent and council tax. Apply by completing a form available from Horsham District Council or the CAB

Job Centre Plus

The Job Centre Plus keeps details of vacant jobs. Ask for your name and address to be put on the register so that they are able to contact you, should a suitable vacancy occur.

Tax Rebate

If you are entitled to any tax rebate you will receive it either when you start a new job, or at the end of the current tax year.

Financial Commitments

If you find you are getting into debt there are two important steps to take.

Firstly keep your creditors informed. Tell them that you have been made redundant and are having difficulty in keeping up with payments, but will come back to them with proposals. You may be able to get them to accept smaller payments for the time being. It is particularly important to keep in touch with your landlord or mortgage company.

Secondly, work out a budget to cover your essential expenditure including all priority commitments as far as possible, even if this means defaulting or paying less to other creditors. Send a copy of the budget to your creditors with proposals. Priority debts are things like rent, mortgage, community charge, fuel and some hire purchase where the creditor can take action such as eviction, repossession or disconnection if you default. Non-priority debts are unsecured debts to banks, finance companies, credit cards, catalogues and traders - if you default on these debts the creditor can sue you in the County Court.

We can help you at the CAB to work out a budget to make sure your priority commitments are covered, and we have specialist money advice workers.

CHECK LIST

If you are made redundant you will be entitled to some or possibly all of the following:

• Notice, or wages in lieu of notice
• A written statement of reason for dismissal
• Holiday pay
• A redundancy payment, and statement of how it is calculated
• Time off with pay for retraining or to seek new work
• Entitlements from the liquidator or from the Dept. of Employment, if your employer is insolvent and unable to pay you
• Job Seekers Allowance
• Housing Benefit or Council Tax Benefit

You are welcome to ask for further information and advice on all these points from the CITIZENS ADVICE BUREAU. Remember our advice is IMPARTIAL - CONFIDENTIAL - INDEPENDENT - and FREE!

LEAFLETS AVAILABLE

• Which Benefit? (FB2)
• Employee's Rights on Insolvency of Employer
• Rights to Notice & Reasons for Dismissal
• Facing Redundancy: Time Off for Job Hunting
• Redundancy Payments (PL 808)

April 2002