"Can I take another job during the redundancy notice period?"

“Can I take another job during the redundancy notice period?”

Have you recently been made redundant?
Been told you will be made redundant?
Worried that you might be made redundant?

Note that it’s your job that’s being made redundant, not you. It means your employer can no longer justify paying someone to do what you used to do.

However, knowing that might not be much help when you’re worried about getting another job so you can continue earning money and paying your bills. This article answers some common questions about redundancy.

For example, you’ll probably want to know how long the redundancy notice period will be, what redundancy package you can expect, and whether or not you can accept another job during the redundancy notice period without losing your redundancy payout.

We are employment law specialists who only ever act for employees, not employers. We have years of experience in helping employees through the redundancy process, to ensure they get what they are entitled to.

Defining redundancy

Your job becomes redundant if your employer no longer needs the work you do, or no longer needs that work to be done in the place you do it, or they no longer need as many people to do the work you do (maybe because they’re using technology or outsourcing the work instead).

Your job might be made redundant if:

There’s been a downturn of business
Your workplace has closed
The business (or your part of it) is moving to another site
The business (or part of it) is being transferred to a different employer
Your employer has become insolvent
Your employer has ceased trading
A new process is being introduced meaning that your job no longer exists
Your work is to be done by other employees
Your work is changing and requires a different skill set

When redundancy is not genuine

For any redundancy to be genuine, there must be a general need to reduce the workforce.

However, there can be times when an employer tries to to get rid of someone for other reasons, while labelling it ‘redundancy’. In this case, the redundancy wouldn’t be fair and you might be able to make a claim for unfair dismissal or discrimination.

Here are some of the things to watch out for:

Your employer has recently taken on new staff or plans to employ more in the near future
You have recently been criticised about your performance
You’ve had a poor relationship with your line manager
You are the only person being made redundant, or you’re one of a few in a large company
You suspect you’re losing your job because you’re pregnant, due to your gender, you’re from an ethnic minority, you’re disabled, you’re gay, or you follow a particular religion

How to tell you’re being made redundant

After following a proper selection process (there’s more about that below), your employer should give you a formal redundancy notice that explains:

Your job is being made redundant
Your redundancy notice period
Your employment end date

What is the statutory redundancy notice period?

This depends how long you’ve worked for your employer:

From one month to two years
You’re entitled to statutory redundancy notice of at least a week – this is the minimum period in law
Two years or more
You’re entitled to one week’s notice for each year you’ve worked there, up to a maximum of 12 weeks (1.5 weeks for each full year you worked aged 41 or older)

If you’ve been given notice of redundancy, and you have at least two years’ service, you are entitled to be paid for ‘reasonable’ time off to look for a new job. Exceptions include: overseas employees, merchant seamen, members of the armed forces and police service employees.

What is the statutory notice period pay?

You’ll be paid as normal during your notice period. This includes time when you are off work due to holiday, sick leave, pregnancy / maternity / paternity / adoption or parental leave. It also includes time when you are willing and available to work but you haven’t been given any work to do.

Even if your employer says you don’t have to work during your notice period, you’re usually entitled to receive your notice pay PLUS all your benefits such as pension contributions – unless your contract says your employer can cease your benefits when you’re made redundant.

How to work out statutory redundancy pay:

1½ week’s pay for each complete year of employment when you were aged between 41-64 inclusive
1 week’s pay for each complete year of employment when you were aged between 22-40 inclusive
½ week’s pay for each complete year of employment when you were aged between 18-21 inclusive

The maximum weekly pay used to work out your statutory redundancy payment is £571 (with effect from 6 April 2022). So the maximum statutory redundancy payment you could receive is £17,130 (2022 figure).

If your contract says you should be paid for regular overtime, this should be included, together with bonuses and regular commission.

Where your earnings vary each week, the amount should be calculated as an average of the 12 weeks leading up to the redundancy.

A redundancy payment below the threshold of £30,000 is usually made without deduction of tax or NI. Above £30,000 will be taxed at the appropriate rate.

What is the contractual redundancy notice period?

Your employment contract might describe a shorter or longer redundancy notice period.

If you’re on contractual notice, you’re entitled to be paid as if you were on statutory notice. So, if your contractual notice period is three months, you’ll be entitled to three months’ pay. If you’re on sick leave, you’ll get sick pay. If you’re on maternity leave, you’ll get maternity pay.

What is your specific situation?

Every set of circumstances is different:

Have you been offered payment in lieu of notice (PILON)? This means your employment ends immediately and you receive all your notice pay in one go. In this case, you can start job-hunting whenever you want to
Have you been offered gardening leave? This means you’re paid as usual until the end of your notice period, but you don’t have to go to work. Check what it says in your employment contract, because you may not be able to start a new job until your official leaving date
Have you been told to use your remaining holiday before you leave?
Has your employer said you can leave early if you get another job during the redundancy notice period?

More about PILON

Your job will end immediately, you’ll receive your full notice pay in one go, and you’ll be free to look for another job straight away.

If your employment contract states that your employer is permitted to give you PILON, or they often give people PILON, then you’ll pay tax on your income as normal.

If PILON is not mentioned in your contract and your employer doesn’t usually give it, you could benefit from two things:

You won’t have to pay tax on your notice pay – unless your notice pay and redundancy pay together add up to more than £30,000
Your statutory notice period is added to your length of service, which could increase the redundancy pay you’re entitled to

More about gardening leave

If you’re put on so-called gardening leave, you don’t have to go to work. However, you’re still technically employed and your employer can ask you to come into work if they want to.

Your job won’t officially end until the finishing date. Until then, you’ll receive your normal pay and benefits in the usual way.

If the time while you’re on gardening leave adds up to another complete year of employment, this could increase your redundancy pay.

The downside is that you can’t start a new job unless your current employer agrees.

What if you get another job during your redundancy notice period?

If you get another job during your redundancy notice period, you can ask your employer to change your finishing date so you can leave early.

If they agree (and they probably will because it saves them money), you’ll still be entitled to your redundancy pay. Ensure you get their agreement in writing, otherwise, you will have resigned and won’t be entitled to any redundancy pay.

If they refuse, you’ll have to ask your new employer to delay your start date until after you’ve officially ended your employment in your current job, whether or not you’re working the redundancy notice period. If you choose to leave early, you will risk losing your redundancy package.

Can you take holiday during your redundancy notice period?

You’ll be paid for any unused holiday entitlement when you leave your job (as long as your contract allows this).

If you want to take holiday during your notice period, you’ll have to ask your employer.

If it says so in your contract, your employer can insist that you take holiday during your redundancy notice period (even if you don’t want to), as long as they give you at least two days’ notice for every day of holiday. For example, if they want you to take five days’ holiday, they have to give you ten days’ notice.

What if you’re made redundant during maternity leave?

If you’re made redundant while you’re on maternity leave, your statutory redundancy pay should be based on your normal weekly pay before you started maternity leave.

If you have contractual redundancy pay, your employer should base this on your normal pay before you went on maternity leave, otherwise it could be pregnancy discrimination.

If you’re getting statutory maternity pay, your employer can reduce your notice period pay so you’re not paid for both at the same time.

If you’re entitled to payment in lieu of notice (PILON), you’ll get your statutory maternity pay PLUS your notice pay.

What is the proper redundancy process?

Your employer must follow a proper redundancy process. If they don’t, it would count as unfair dismissal and you might be entitled to compensation. Here’s a broad overview of what they should (and should not) do for redundancy to be lawful:

Decide the redundancy selection criteria, which should be transparent and objective. Such criteria might include timekeeping and absence records, disciplinary records, and performance records such as appraisals
With collective redundancies – that is when the company is making 20 or more employees redundant within 90 days – the selection criteria must be discussed with a union or employee representative
Make a list of all the employees who do similar work to the jobs that are no longer required. This is called the redundancy selection pool
Ensure the team who are selecting employees for redundancy know about the work, skills and qualifications of the people in the pool
Note that redundancy decisions must be objective, and not based on protected characteristics such as disability, race, sexuality, or part-time or pregnant workers, as this would be discriminatory
Invite each employee in the pool for an individual meeting to tell them they have been provisionally selected for redundancy. You should be allowed to take someone with you to this meeting if you want
Tell these employees in writing that they are ‘at risk of redundancy’ but that no decision has yet been taken (however, if any employee has access to confidential information, they might be removed from the workplace at this stage for security reasons)
Some employers ask employees to apply for their own job. If this happens, it’s best to apply. If you’re unsuccessful, you’ll be entitled to redundancy. Ask your employer to clarify whether they are still prepared to make a redundancy payment, or if they are willing to offer you voluntary redundancy
Consider suitable alternative roles for the employees in the pool, where possible, and offer them before the current job ends. If this doesn’t happen, it would count as unfair dismissal. Note that any alternative role you’re offered might not be at the same level as your current job, and might be at a different site, but should be ‘reasonable’. Deciding whether to accept it will depend on pay, status, hours and location. If you accept the alternative role, you get four weeks to decide if it’s suitable. If not, you are still entitled to the original redundancy package. Note that you can’t expect redundancy if you refuse a reasonable offer or resign within the four-week trial
The minimum consultation period depends on the number of proposed redundancies:
- 20-99 proposed redundancies – at least 30 days
- 100 or more proposed redundancies – at least 45 days
Give the selected employees time to think about it and respond
Score the performance and skills of employees against the selection criteria, perhaps using a matrix or grid
Tell the employees whether their job is safe or if they are being made redundant
If employees are being made redundant, negotiate a settlement agreement with them (this is known as a compromise agreement in Northern Ireland)
If their employment contract allows employees to appeal against redundancy, follow that process. If not, it might lead to a claim for unfair dismissal

More about the selection pool

Your employer doesn’t have to make a selection pool if you’re doing a unique job and it’s the only one selected for redundancy. At the other extreme, there’s no need for a selection pool if the entire company is closing down as everyone will be made redundant together.

People in the selection pool should be doing the same or similar roles even if they work different shifts or in different parts of the business or on other sites. If you find yourself the only employee who does a certain job in a selection pool while other employees who do the same job are not in it with you, you could challenge your employer’s decision to select you.

Contractors and agency staff can’t be included in the selection pool unless they have attained the status of ’employee’. If contractors and agency staff are kept on while employees face redundancy, this could be considered unfair (unless the contractors and agency staff are on a short-term project or have special skills that employees don’t).

What this means to you

Being made redundant can be an emotional experience, but it’s important to remain objective – that’s one way our legal expertise can be a useful support for you.

If the redundancy is unfair for any reason, we can help win you compensation.

We can also help if your employer:

Doesn’t pay you for your redundancy notice period
Tells you to leave straight away without giving you PILON
Doesn’t pay what you’re entitled to
Hasn’t followed a proper redundancy process

In a genuine redundancy situation, we can help you negotiate a fair settlement. For example, we can ask your employer to provide you with a good reference in return for you agreeing to do a smooth handover with your replacement.

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