Laid off or made redundant

What are your rights if your employer asks you to stay at home because there isn’t enough work for you

What are your rights if your employer asks you to stay at home because there isn’t enough work for you

When Keith Renshaw returned home, pale and shell-shocked from his job as an account executive in a Manchester advertising agency, he told his wife: “I’m going to be laid off. Is that better or worse than being sacked or made redundant? ”
He soon found out. An unexpected big new online client meant Keith didn’t lose his job after all. But he was one of the lucky ones. “A lot of people think that redundancy and being laid off are the same thing,” employment counsellor Dawn Reynolds says. “And certainly both have their own set of problems.”

Simple terms

She adds: “In simple terms, redundancy means your job has gone for good, but when you’re laid off it still exists and you will be taken back on when things pick up. But when will that be? In the meantime, you won’t be paid while you’re laid off and you are free to look for other employment. You will also be entitled to compensation totalling half your ordinary rate of pay.
“No wonder people get confused. In many cases, employers can’t tell just how long someone will be laid off. And if your hours have dropped off, but you are still coming to work, then you haven’t been laid off.”

Experts point out that if you’ve been receiving Working Tax Credit when you are laid off payments might not stop straight away and the Tax Credit Office should be told of your changed circumstances. Remember, too, that you will be treated by the tax authorities as though you are still working for up to four weeks from the time you are laid off.

Dawn Reynolds stresses that many lay-off victims accept the first terms that are offered, rather than negotiate a better deal. “You should always feel free to negotiate and in many cases you will find the terms being offered are surprisingly flexible,” she says.
Jim Mellor, laid off by a Sheffield electrical components manufacturer last year, remembers that at first his boss did not tell him he was being laid off, but asked him to take a lengthy unpaid holiday.

If you think being laid off might be a possibility, it’s well worth checking if your contract allows for it - most don’t. If it does, however, you may be able to claim you’ve actually been made redundant.

If your employer does have the right to lay you off without pay, you should be able to claim a guarantee payment, so long as you have worked at the company for at least a month. This is the minimum you should be paid if you are laid off. After you have used up any guarantee pay, you might be entitled to social security benefits. And if you have at least two years’ service, you might be able to claim a redundancy payment if you are:

• Laid off for four consecutive weeks.
• Laid off for more than six weeks in any 13-week period.

You have to give written notice to your employer of your intention to claim redundancy, but remember that your boss can refuse the claim by maintaining there’s a reasonable chance you will be back working normally within four weeks and the job will last at least three months.

Even if your contract doesn’t allow for lay-offs and you can’t claim redundancy, there are sometimes other options, including constructive dismissal. There are other procedures to claim redundancy, but you will usually need specialist advice to hack through the jungle of legislation - your local Citizens Advice Bureau is a good place to start.

You can, of course, take up other work while you are laid off, unless your contract specifically forbids this, so it’s a good idea to get references you can use when going after other jobs. What you can’t do is take a job that might be against your employer’s interests - like working for a rival company.

If you do get other work while laid off, check with your boss that you will be able to return to your normal job as soon as conditions improve. If you don’t do this, your employer may argue you have actually resigned by taking other work.

Hardship and heartbreak

While being laid off might not sound as traumatic as redundancy, it can cause just as much hardship and heartbreak, according to Dawn Reynolds, who recently came across the case of a man who had been laid off by a company for whom he had worked for 29 years.
She explains: “He told me: ‘I have been laid off with no pay and have no idea when I will be back at work. There is nothing in my contract about being laid off without pay. I am worried sick about what to do.’

“As there was nothing in the contract regarding lay-off pay, the man was advised to ask to be made redundant after he hadn’t been paid for five weeks. After taking advice, the firm reinstated the man and gave him his old job back at a slightly increased salary. It certainly pays to make a fuss if you think you’ve been treated unfairly.”

Another lay-off victim lost his job because the company he worked for was struggling and eventually went into administration. He remembers: “The workers were the last to know what the real situation was and we were told it wouldn’t be long before we got our jobs back, although in reality there was no chance of that.

“When the firm finally closed, we had to wait for the administrators to go through the company finances and the employees were the last to be paid. I had to wait six months before I got what I was due. My advice to anyone in a similar position is to make sure you know exactly what your contract says about getting laid off. If you think you have a case, get qualified advice.”

If unpaid lay offs aren’t allowed under your employment contract, you should make your employer knows it should still give you statutory guarantee pay, although you can agree to accept less or even take some annual leave instead.
But being laid off is not always doom and gloom. “It is basically a temporary situation,” Dawn Reynolds says. “And in many cases, employees do get their jobs back. No one likes being laid off, but as the economy improves there’s a good chance that it’s a story which could eventually have a happy ending.”

What to do if you’re laid off

• Negotiate terms of a severance package - go for compensation for things like unused holidays and sick leave.
• Get references. It’s also worth trying to get your boss to endorse your skills on a business networking site like LinkedIn.
• Structure your remaining workdays to gather what you’ll need to take with you, like contact lists and important emails.
• Be professional. Don’t let any hurt feelings tempt you into behaving badly. Getting laid off is stressful, but be polite to bosses and colleagues during those last weeks - you might need their help later on.
• Don’t hide your lay off from family and friends. You’ll need their support to get you back on your feet.
• Don’t become ‘web bound’. Surfing the internet for a new job will only take you so far. To land a new job, you’ll have to get out and meet real people. The vast majority of good jobs are never advertised.