Careers
Redundancy
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Introduction
Few people today realistically expect to have a "job for life", but finding that you are being made redundant is often a considerable shock - and one which it's sometimes hard not to take personally. It is important to remember that it is a job that is being made redundant, not the job holder.
Whilst some individuals will welcome redundancy as an opportunity to make a fresh start (perhaps with some financial cushioning attached), others will feel upset and angry and quite probably very worried about the financial implications for their family or their lifestyle. Here we will take a look at some practical responses to the threat or execution of redundancy.
What is redundancy?
Redundancy is, quite simply, one reason for dismissal. It involves either the closure of a whole business or of a particular workplace within a business, or a reduction in the size of the workforce.
Redundancy is, however, a special reason for dismissal and one which is legislated closely. An employer who wishes to make staff redundant must follow a series of procedures and take certain steps to ensure that the redundancy is carried out fairly. If this is not done, employees may be able to make a claim for wrongful dismissal, unfair dismissal or for redundancy payment (which may be determined either by the individual's contract of employment or by the legal minimum in force at the time).
Employment regulations lay a responsibility on an employer to implement redundancies in a planned way, to consult on alternatives to redundancy and on selection criteria for redundancy and to give the Department of Trade and Industry (DTI) a defined period of notice if more than 20 employees are to be made redundant. Details of the arrangements that must be made are explained at the website of the Employment Relations Directorate of the DTI and a number of publications are also available, covering topics such as redundancy payments, unfair dismissal, collective redundancies and business transfers, and time off for job-hunting or training when facing redundancy.
Am I being treated fairly?
Redundancy legislation and its application are explained in a very accessible way at a number of websites. The responsibilities of an employer, for instance, are clearly set out on the CompactLaw website. Legal advice on your rights and your options in a variety of situations is well explained in the employment law section of FreeLawyer.
What do I do now?
If you are made redundant, or know redundancy is clearly on the horizon, a period of personal stocktaking is important. As well as considering your next career move, it is vital to get firm grip on your personal finances. If you receive a redundancy payment, it's a good idea to take advice on how to invest it and also how to cope with meeting both any immediate bills and your usual financial outgoings. Advice on financial planning is available via the financial arm of Membership Services or by talking to an Independent Financial Adviser (IFA). One route to finding a local IFA is provided by looking at the website for the Association of IFAs.
It is sensible to tackle straight away any standing commitments that you have. For example:
Your mortgage
Keeping a roof over your head is important. Tell your lender straight away what has happened and explore what alternative arrangements could be made. Note carefully - and preferably get in writing - what they suggest, what interim arrangements are agreed and their agreed duration. Click here for the leaflet Protecting your Mortgage .
House and life insurance
Don't just stop paying premiums! Contact the companies concerned and discuss your new situation with them. Again, try to get any new arrangements in writing.
Credit cards and other loans
Again, call the companies concerned and discuss things with them. If you took out any insurance protection against unemployment, now is the time to use it!
Gas, electricity, phone, water bills, etc
Most of the utilities companies will be able to offer special arrangements if you are having difficulty paying your bills. Contact them and explain.
Private medical insurance
If you have private medical insurance, in your new circumstances you should review whether you wish and can afford to continue with it. If you do, contact the company concerned to see whether they can offer you an alternative arrangement for a temporary period.
Holidays and other big purchases
If you've already booked your next holiday, ordered your new car or conservatory or contracted for some other major purchase, consider whether you should still go ahead. Investigate the penalties for cancellation as well as reflecting on the desirability of the item.
If problems develop, the Citizen's Advice Bureau can help with debt counselling.
Whilst you are unemployed and looking for a new job, you may be eligible for a range of services, benefits or allowances administered by the Department for Work and Pensions (DWP) for people of working age. Click here to check.
Finding a new future
Redundancy, particularly if cushioned by redundancy payments, offers an opportunity to reflect on your career and decide what you want to do next. It doesn't have to be the same as the job you have just left! Maybe your next choice entails some kind of training or uses skills from your old job in a quite different field. Identifying your strengths and weaknesses, and working out which parts of your previous jobs you liked or disliked is an important part of this process. Useful information is contained in 'Changing Career Direction', a professional brief published by the Institute of Physics. Click here for more details.
For some people, being made redundant provides the impetus to set up as a consultant or start up a small business. Information and resources for those new to, or considering self-employment are available here. Advice is also available from the Institute's Consultancy Group.
If you are at an appropriate age, you may wish to discuss with your employer whether, instead of being made redundant, you could opt for early retirement. This may depend to a large extent on what financial provision you have already made for your retirement. Click here for more information on retirement.
If you intend to continue working as an employee, finding your next job should become your full-time occupation. Comprehensive information on finding a job can be found here. While you are searching for work, do your best to keep your knowledge and skills up to date. Continue to read relevant literature, maybe keep in touch with former colleagues, and use the resources of the Institute and its Groups and Branches, with their meetings and newsletters, to stay well informed and develop interests in other areas. A reduced Institute membership subscription is available to those on low incomes. Email the Membership Department for more information.
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