How to Challenge Your Redundancy and Negotiate a Severance Package in the Wake of the Pandemic
November 18th, 2021
Although redundancies are a fact of life in the modern workplace, their impact has been magnified by the economic stress of the pandemic placed upon businesses and individuals. Businesses have had to put cost-cutting measures in place to survive this difficult economic period, and for some individuals, this has resulted in their job being put at risk of redundancy.
This is particularly pertinent at the moment given that the Coronavirus Job Retention Scheme (CJRS), also known as the furlough scheme, ended on 30 September 2021. The purpose of the scheme was to provide grants to employers to ensure they could retain and continue to pay staff, despite the impact of the pandemic. With this safeguard now removed, employees have been left more vulnerable to redundancy.
If you have been recently given your redundancy notice, this blog will outline the steps you can take to challenge your proposed redundancy and/or help you maximise your severance package.
Is There Legitimate Grounds for Your Redundancy?
During the redundancy consultation process, you have the right to ask questions about the reason and justification for the proposed redundancy. Employers can only effect redundancy dismissals when there is a genuine redundancy situation and they have followed a fair redundancy procedure. Therefore, it is important you gather information to determine whether this is a genuine redundancy situation or a “sham redundancy”.
In other words, is it an attempt to disguise an ulterior motive for termination of employment e.g., poor performance or misconduct? If it is indeed a “sham redundancy”, you could have grounds to bring a claim, such as unfair dismissal or discrimination.
Do You Have Levers That Will Help Increase Your Severance Package?
If you do find that your dismissal is not a genuine redundancy, you should consider whether the real reasons behind your redundancy could be used to help you negotiate a better severance package. For instance, if you feel as if you have been unfairly selected for redundancy for a discriminatory reason – whether that is race, religion, age, sex, or sexual orientation – you could have a valuable claim which may result in some form of remuneration.
A fair dismissal for poor performance also results in a longer termination process than a redundancy exit, during which time employees accrue salary, bonus, equity, and benefits. If you find that your redundancy is not on fair grounds, this loss must be factored into any settlement negotiation.
N.B. If there is a risk that your employer is going into administration, you should negotiate an accelerated payment date for any payments due to you.
Can Your Notice Period Be Negotiated?
If you are being made redundant, you must be given a notice period, the length of which varies depending on how many years of service you have with the employer:
- Under 2 years employment = 1-weeks’ notice
- 2-12 years employment = 1-weeks’ notice for each year served
- Over 12 years employment = 12 weeks’ notice
However, you must always check your contract of employment, as you may be contractually entitled to a longer notice period than indicated above. Alternatively, you may want to opt for garden leave, which could buy you some time to find a new job whilst still being employed.
“This document is for informational purposes only and does not constitute legal advice. It is recommended that specific professional advice is sought before acting on any of the information given.”