How to cope if you are made redundant

Jan 09 – 

It’s official. Britain is in a recession.  In the last quarter of 2008 the number of people out of work leapt by 131,000 to a total of 1.93 million – a rate of 6.1 per cent. And January marked the 12th consecutive monthly rise in unemployment to make this the biggest recession in the UK since the early 1990s. So it’s not surprising that a recent survey by the TUC found that around 13 per cent of workers (over 3 million) are concerned about the threat of redundancy, especially when you consider the demise of some of the UK’s biggest institutions.

Woolworth’s, for example, closed its doors for the last time in January after 99 years as the mainstay of the British high street with the loss of 27,000 jobs. Luxury goods manufacturer Burberry soon followed with 1,100 redundancies announced. Whilst Corus and Philips are shedding 2,500 and 6,000 jobs respectively in the first quarter of 2009 along with a further 850 job cuts at Ford. By the start of February it has been estimated that over 50,000 jobs had already been lost with independent analysts suggesting that the current unemployment level of 1.93m is likely to pass the 2.8m mark by the end of the year.¹

If your company has wielded the axe over your job and you find yourself facing redundancy, it is important to ensure that you are fully prepared to cope with the financial, professional and psychological challenges that you will inevitably face once your P45 lands on your desk.

What is redundancy?

Let’s start by making it clear that it is your job that has been made redundant, not you. You have not been ‘sacked’. The global economic downturn has put most – if not all – organisations under pressure to compete and sustain their businesses. But if customers can’t afford to buy cars, for example, the likes of Ford et al cannot afford to continue building new cars and paying workers if people are not buying their products. So to remain competitive and ensure the long term future of their businesses, organisations have to make job cuts and as harsh as it seems, you are simply just a number. But being a number can have its advantages as we shall see later on.

How best to vent your spleen

When your boss does his Alan Sugar impression and says, “You’re fired”, your first reaction may be to howl, scream and let loose with verbal diatribe. But bite your tongue and save your frustration until you get home because a knee-jerk reaction at this stage may jeopardise any claim you may have for unfair dismissal. Not forgetting, who are you going to call upon for your next reference? Remember not to take redundancy personally and be mindful that once you have been informed of your impending redundancy, your employer is legally obliged to grant you time off during your final weeks or months to look for a new job.

Know your rights

Employment law can be a minefield at the best of times but you need to understand what your rights are. Your employer should have selected you for redundancy in a fair way, however, if you feel somewhat victimised or offered an alternative position which proves to be wholly unsuitable – whether it’s due to location or it is a role further down the career ladder – you have the right to make a claim for unfair or constructive dismissal to an Employment Tribunal within three months. In all other cases, the Department of Trade & Industry stipulates that the minimum period of notice of pending redundancy is one week if you have worked for your employer for long than one month but less than two years; two weeks for two years’ service; and one additional week for each full year you have worked up to a maximum of twelve weeks’ notice. If you are unsure of any legal aspects of your redundancy, contact your Trade Union representative or speak with an adviser at the Citizen’s Advice Bureau.

Your redundancy package

If you have a contract, check it to find out how much you will be paid. You are legally entitled to redundancy pay if you have served your employer for more than two years and on 1st February 2009, statutory redundancy pay rose from £330 to £350 per week for each year worked. Whilst ex-gratia termination payments are tax-free up to a value of £30,000. However, the payment due to an employee under the statutory redundancy payment scheme is determined by their age and length of service. To calculate what you may be entitled to, the Department for Business Enterprise & Regulatory Reform has an online ready reckoner to help you (see: ).

What to do with the money

The average UK worker has enough savings to last 52 days if they lose their job, according to a report by the Yorkshire Building Society in 2008. They estimate that the mean outgoings are £1,445 with the average person having £2,472 in accessible savings. However, around one-third of workers only have enough to see them through 11 days. Regardless of how much extra money you get as part of your redundancy pay you need to get into the mindset of being unemployed immediately because it may take you longer than you think to get another job and even when you start your new post, you will have to work a month in hand before you get paid. So dismiss any notion of blowing your new lump sum on an exotic holiday or new car and save it – this is your rainy day and just because the money has stopped coming in doesn’t mean the bills don’t need paying any longer.

Sign on

There is no shame in being made redundant. In fact, more than 9,100² people were handed their P45 every week in 2008 and this is likely to rise to around 15,000 workers each week as the recession claims more victims in 2009. Register with Job Centre Plus and the Benefits Office to claim what financial support you may be entitled to. After all, this is what your National Insurance (NI) contributions have paid for all these years. As John Wheatley from the Citizens Advice Bureau say, “If you don’t [sign on] you could lose your credited NI contributions, and that would affect your entitlement to state pensions and other benefits”.

Get on

Depending on your financial situation you may find that you need to find a new job straight away to ensure that you have some money coming in. In these circumstances, register your details with the job websites and recruitment consultancies that offer the kind of vacancies you are looking for. Read the local, national and trade press for any new jobs and if you already know the companies you would like to work for, send them a speculative letter followed by a phone call a week or so later – even if they are not recruiting right now, this puts your name in their mind so that when a suitable position arises they will consider you. And network for Britain, put your name about in the right circles and pull in a few favours from former colleagues, professional acquaintances and even former employers.

Or if you are financially comfortable, then use this time off as an opportunity to consider your next move. Forget about spending all day slouched in front of the TV watching Jeremy Kyle and Neighbours, you can do all that when you retire. Redundancy can be a sharp wake-up call that focuses your mind on what really matters to you. Did you enjoy doing the job you have been made redundant from? Would you like to find the same job in another company or do you feel that you have enough experience and skill to take on a more senior position? If so what training could you do during your time off in-between jobs? Is it time for a change of direction? Or is this the perfect opportunity for going it alone – wouldn’t it be great to say to your old boss, ‘Thank you for making me redundant’?

Being made redundant is not always doom and gloom. Whilst acknowledging the obvious effects that losing your job can have on your financial, psychological and professional situation, the fact remains that redundancy is not the end of the world. For some it acts as a catalyst to steer their career and life in a new direction. Whereas for others it enables them to take stock of their careers and recognise their strengths, skills and abilities and use this new-found self awareness to enhance their marketability when looking for a new position. Either way its not the situation that you are in now that is important, it’s what you do about it that matters. As Henry Ford famously said, ‘If you think you can or think you can’t you are probably right’.

¹The Daily Telegraph, 26th January 2009

²Department for Employment & Education

About yourcareermatters
CareerMatters was founded as part of MacKenzie-Cummins Communications in 2006 by Paul MacKenzie-Cummins MICG (Member Institute of Careers Guidance), regarded as one of the UK's leading career's advice and guidance writers and specialist PR consultant for the UK recruitment industry. Since 2006 Paul has been the leading advice writer for and - the two biggest careers website in the world -tackling all aspects of workplace and management issues, job seeking, career change and hiring trends. In 2006, 2007 and 2008 his writing contributed to Monster winning the Best Employment Advice on the Internet Award for an unprecedented three times beating the likes of The Guardian, Learn Direct and Personnel Today on each occasion. And his work was a runner-up for the same award in 2009. In 2009 Paul was a nominee in the prestigious HR Journalist of the Year Award and Recruitment, Retention & Motivation Journalist of the Year Award. Paul has been commissioned to write more than 500 careers advice and guidance articles for a number of lpublications, from regional and national newspapers to industry publications and various career-specific websites in the UK and USA. Recently, Paul was the Technical Editor for career psychologist Dr Rob Yeung's Job Hunting & Career Change for Dummies (John Wiley & Son, 2007). Dr Yeung is better known as the TV psychologist for Channel 4's Big Brother and the BBC's Who Would Hire You? series. Clients include: MSN Careers (Europe) TheLadders TotalJobs IntaPeople Recruitment Lifetracks/YouthNET MediaSalesJobs The Press Gazette

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