I am the Human Resources Manager for a small employer in the construction industry, which is currently on the verge of insolvency and will likely have to make many of its staff redundant. There is a possibility that we will be unable to meet our statutory redundancy pay commitments for some of our more senior employees. Who can we contact for help in meeting our statutory commitments if we become insolvent?

If your business would become insolvent as a result of making the statutory redundancy payments, the Insolvency Service’s Redundancy Payments Service (RPS) may be able to help.

Making staff redundant

Overview

Redundancy is when you dismiss an employee because you no longer need anyone to do their job. This might be because your business is:

changing what it does

doing things in a different way, for example using new machinery

changing location or closing down

If you’ve been impacted by coronavirus (COVID-19), you can get funding to continue to pay your employees instead of making them redundant. This is known as furloughing.

For a redundancy to be genuine, you must demonstrate that the employee’s job will no longer exist.

Redundancies can be compulsory or non-compulsory. If you do have to make redundancies you can get help from Jobcentre Plus.

Employee rights

Employees have certain rights and may be entitled to redundancy pay if they’re made redundant.

All employees under notice of redundancy have the right to:

reasonable time off to look for a new job or arrange training

not be unfairly selected for redundancy

You should always take steps to avoid redundancies before dismissing staff.

Alternative employment

Employers must try to find suitable alternative employment within the organisation for employees they’ve made redundant.

Employees can try out an alternative role for 4 weeks (or more if agreed in writing) without giving up their right to redundancy pay.

Avoiding redundancies

You should take steps to avoid compulsory redundancies, for example by:

seeking applicants for voluntary redundancy or early retirement

seeking applications from existing staff to work flexibly

laying off self-employed contractors, freelancers etc

not using casual labour

restricting recruitment

reducing or banning overtime

filling vacancies elsewhere in the business with existing employees

short-time working or temporary lay-offs

Offers of alternative work

Even if you’ve selected someone for redundancy, you can still offer them alternative work.

For an offer to be valid:

it should be unconditional and in writing

it must be made before the employee’s current contract ends

it should show how the new job differs from the old

the job must actually be offered to the employee - they should not have to apply

the new job must start within 4 weeks of the old job ending

Employees who accept an offer of alternative work are allowed a 4-week trial period to see if the work is suitable. If you both agree that it is not, they can still claim redundancy pay.

The trial period can be longer than 4 weeks if you agree this in writing.

If you think the job is suitable but the employee refuses to take it, they might lose any redundancy pay entitlement.

Lay-offs and short-time working

You can lay off an employee (ask them to stay at home or take unpaid leave) when you temporarily cannot give them paid work - as long as the employment contract allows this.

Short-time working is when an employee works reduced hours or is paid less than half a week’s pay.

Laying off staff or short-time working can help avoid redundancies - but you have to agree this with staff first.

This could be in:

their employment contract

a national agreement for the industry

a collective agreement between you and a recognised trade union

National and collective agreements can only be enforced if they’re in the employee’s employment contract.

You may also be able to lay off an employee or put them on short-time working:

where you have clear evidence showing it’s been widely accepted in your organisation over a long period of time

if you agree with the employee to change their employment contract to allow them to be laid off or put on short-time working (this will not automatically give you the power to do this without their consent in the future)

Statutory guarantee payments

Employees are entitled to these if you do not provide them with a full day’s work during the time they’d normally be required to work.

The maximum payment is £30 a day for 5 days (£150) in any 3 months. If employees usually earn less than £30 a day, they’ll get their usual daily rate. For part-time workers, the rate is worked out proportionally.

Employees can claim a redundancy payment from you if the lay-off or short-time working runs for:

4 or more weeks in a row

6 or more weeks in a 13 week period, where no more than 3 are in a row

They must give you written notice in advance that they want to make a claim.

You do not have to pay if they’ll return to normal working hours within 4 weeks.

If you do not give guarantee pay to someone who’s entitled to it, they could take you to an employment tribunal.

There’s more advice on lay-offs and short-time working on the Acas (Advisory, Conciliation and Arbitration Service) website.

Non-compulsory redundancy

Voluntary redundancy

This is where you ask employees if they’d like to volunteer for redundancy.

You must have a fair and transparent selection process and tell employees they will not automatically be selected just because they applied.

Early retirement

This is where you offer employees incentives to retire early. It is used as an alternative to voluntary redundancy.

The offer must be made across the workforce - you cannot single out specific individuals.

You cannot force anyone into early retirement - it must be the employee’s choice.

Compulsory redundancy

If you decide you need to make compulsory redundancies, you must:

identify which employees will be made redundant

make sure you select people fairly - do not discriminate

Fair selection criteria

Fair reasons for selecting employees for redundancy include:

skills, qualifications and aptitude

standard of work and/or performance

attendance

disciplinary record

You can select employees based on their length of service (‘last in, first out’) but only if you can justify it. It could be indirect discrimination if it affects one group of people more than another.

Do not rely on length of service as your only selection criteria - this is likely to be age discrimination.

Unfair selection criteria

Some selection criteria are automatically unfair. You must not select an employee for redundancy based on any of the following reasons:

pregnancy, including all reasons relating to maternity

family, including parental leave, paternity leave (birth and adoption), adoption leave or time off for dependants

acting as an employee representative

acting as a trade union representative

joining or not joining a trade union

being a part-time or fixed-term employee

age, disability, gender reassignment, marriage and civil partnership, race, religion or belief, sex and sexual orientation

pay and working hours, including the Working Time Regulations, annual leave and the National Minimum Wage

You should always consult employees in a redundancy situation.

Redundancy consultations

If you do not consult employees in a redundancy situation, any redundancies you make will almost certainly be unfair and you could be taken to an employment tribunal.

You must follow ‘collective consultation’ rules if you’re making 20 or more employees redundant within any 90-day period at a single establishment.

There are no set rules to follow if there are fewer than 20 redundancies planned, but it’s good practice to fully consult employees and their representatives. An employment tribunal could decide that you’ve dismissed your staff unfairly if you do not.

Consultation does not have to end in agreement, but it must be carried out with a view to reaching it, including ways of avoiding or reducing the redundancies.

Collective consultation

Follow these steps.

You must notify the Redundancy Payments Service (RPS) before a consultation starts. The deadline depends on the number of proposed redundancies.

Consult with trade union representatives or elected employee representatives - or with staff directly if there are none.

Provide information to representatives or staff about the planned redundancies, giving representatives or staff enough time to consider them.

Respond to any requests for further information.

Give any affected staff termination notices showing the agreed leaving date.

Issue redundancy notices once the consultation is complete.

Notification

Notify RPS by filling in form HR1. Instructions on where to send it are on the form.

The deadline for notifying RPS depends on the number of proposed redundancies.

Number of proposed redundancies | When notification to RPS must be given

20 to 99 | 30 days before the first redundancy

100 or more | 45 days before the first redundancy

You can be fined an unlimited amount if you do not notify RPS.

Consultation

There’s no time limit on how long consultations last, but there is a minimum period before you can dismiss any employees.

Number of proposed redundancies | Minimum consultation period before dismissal

20 to 99 | 30 days

100 or more | 45 days

Information you must provide to representatives or staff

You must provide written details of:

the reasons for redundancies

the numbers and categories of employees involved

the numbers of employees in each category

how you plan to select employees for redundancy

how you’ll carry out redundancies

how you’ll work out redundancy payments

Further information

Download the guidance on how to manage collective redundancies from Advisory, Conciliation and Arbitration Service (Acas).

Giving staff notice

You must give staff notice and agree a leaving date once you’ve finished the redundancy consultations.

Give staff at least the statutory notice period, based on how long they have worked.

Length of service | Notice you must give

1 month to 2 years | At least a week

2 years to 12 years | A week’s notice for every year employed

12 or more years | 12 weeks

You can allow staff to leave earlier than the planned leaving date (for example without notice) by offering payment in lieu of notice.

Notice pay

You must give staff notice pay - based on their pay rate and notice period - or make a payment in lieu of notice.

Your employee’s notice pay is based on the average they earned per week over the 12 weeks before their notice period starts.

If your employee earned less than usual because you used the Coronavirus Job Retention Scheme to put them ‘on furlough’, you must work out their notice payments based on what they would have earned normally.

Pay in lieu of notice

If you have included a payment in lieu of notice clause in the employment contract, you can end your staff’s employment with no notice. This lets you make a payment to cover the notice period they would have worked.

These payments must have tax and National Insurance deducted.

When you make payments in lieu of notice, you still have to pay staff the basic pay they would have got during the notice period. You also have to pay pension, private health care insurance or other contributions if it’s in the employee’s contract.

Redundancy pay

Employees you make redundant might be entitled to redundancy pay - this is called a ‘statutory redundancy payment’.

To be eligible, an individual must:

be an employee working under a contract of employment

have at least 2 years’ continuous service

have been dismissed, laid off or put on short-time working - those who opted for early retirement do not qualify

You must make the payment when you dismiss the employee, or soon after.

A redundant employee also has the right to a written statement setting out the amount of redundancy payment and how you worked it out.

Statutory redundancy pay rates

These are based on an employee’s age and length of employment and are counted back from the date of dismissal.

Employees get:

1.5 weeks’ pay for each full year of employment after their 41st birthday

a week’s pay for each full year of employment after their 22nd birthday

half a week’s pay for each full year of employment up to their 22nd birthday

Length of service is capped at 20 years.

Your employee’s weekly pay is the average they earned per week over the 12 weeks before the day they got their redundancy notice.

If your employee earned less than usual because you used the Coronavirus Job Retention Scheme to put them ‘on furlough’, you must work out their redundancy payments based on what they would have earned normally.

Weekly pay is capped at £544. The maximum amount of statutory redundancy pay is £16,320.

Statutory redundancy pay rates may be different in Northern Ireland.

You can give your staff extra redundancy pay if you want to, or have a qualifying period of less than 2 years.

You can use the redundancy pay calculator to work out payments.

If you do not pay

If you fail to pay redundancy pay or if an employee disagrees with the amount, they have 3 months from the date their employment ended to make a claim for payment to an employment tribunal.

If an employee does not claim in time, a tribunal still has 6 months to decide whether or not they should get a payment.

If you have financial difficulties

You’d have to repay any debt as soon as possible. Email the Redundancy Payments Service for more information. Include all of the following in your email:

your name

whether you’re the employer

whether you should be the main point of contact

the name of your business

your business address

number of redundancies

Tax

Employees who’ve been made redundant only pay tax on payments over £30,000. They do not pay any National Insurance.

Tax and National Insurance are deducted from other termination payments, for example payment in lieu of holiday or notice.

Getting help

If you have to make redundancies, Jobcentre Plus can give you and your employees support and advice through its Rapid Response Service.

Support could include:

helping people facing redundancy to write CVs and find jobs

providing general information about benefits

helping people to find the right training and learn new skills

helping with costs like travel to work expenses

Jobcentre Plus may also provide on-site support for large scale redundancies.

In Scotland, Rapid Response Service support is delivered through Partnership Action for Continuing Employment (PACE) - there’s more information on the Skills Development Scotland website.

In Wales, the service is delivered by the ReAct scheme.

Acas has an online redundancy helpline.

How to get help

To find out how your business can use the Rapid Response Service, email rrs.enquiries@dwp.gov.uk and include:

your contact details

the town(s) your business is based in (including postcodes)

the location(s) of the redundancies


I am an employee and shop steward (USDAW) at a carpet retailer in the Midlands. Owing to the effect of COVID-19 on the retail trade my employer has announced 25 redundancies, without bothering to run a full consultation either with our union or with the employees as a whole. Is it ok for the company not holding a consultation?

If you do not consult employees in a redundancy situation, any redundancies you make will almost certainly be unfair and you could be taken to an employment tribunal.

Making staff redundant

Overview

Redundancy is when you dismiss an employee because you no longer need anyone to do their job. This might be because your business is:

changing what it does

doing things in a different way, for example using new machinery

changing location or closing down

If you’ve been impacted by coronavirus (COVID-19), you can get funding to continue to pay your employees instead of making them redundant. This is known as furloughing.

For a redundancy to be genuine, you must demonstrate that the employee’s job will no longer exist.

Redundancies can be compulsory or non-compulsory. If you do have to make redundancies you can get help from Jobcentre Plus.

Employee rights

Employees have certain rights and may be entitled to redundancy pay if they’re made redundant.

All employees under notice of redundancy have the right to:

reasonable time off to look for a new job or arrange training

not be unfairly selected for redundancy

You should always take steps to avoid redundancies before dismissing staff.

Alternative employment

Employers must try to find suitable alternative employment within the organisation for employees they’ve made redundant.

Employees can try out an alternative role for 4 weeks (or more if agreed in writing) without giving up their right to redundancy pay.

Avoiding redundancies

You should take steps to avoid compulsory redundancies, for example by:

seeking applicants for voluntary redundancy or early retirement

seeking applications from existing staff to work flexibly

laying off self-employed contractors, freelancers etc

not using casual labour

restricting recruitment

reducing or banning overtime

filling vacancies elsewhere in the business with existing employees

short-time working or temporary lay-offs

Offers of alternative work

Even if you’ve selected someone for redundancy, you can still offer them alternative work.

For an offer to be valid:

it should be unconditional and in writing

it must be made before the employee’s current contract ends

it should show how the new job differs from the old

the job must actually be offered to the employee - they should not have to apply

the new job must start within 4 weeks of the old job ending

Employees who accept an offer of alternative work are allowed a 4-week trial period to see if the work is suitable. If you both agree that it is not, they can still claim redundancy pay.

The trial period can be longer than 4 weeks if you agree this in writing.

If you think the job is suitable but the employee refuses to take it, they might lose any redundancy pay entitlement.

Lay-offs and short-time working

You can lay off an employee (ask them to stay at home or take unpaid leave) when you temporarily cannot give them paid work - as long as the employment contract allows this.

Short-time working is when an employee works reduced hours or is paid less than half a week’s pay.

Laying off staff or short-time working can help avoid redundancies - but you have to agree this with staff first.

This could be in:

their employment contract

a national agreement for the industry

a collective agreement between you and a recognised trade union

National and collective agreements can only be enforced if they’re in the employee’s employment contract.

You may also be able to lay off an employee or put them on short-time working:

where you have clear evidence showing it’s been widely accepted in your organisation over a long period of time

if you agree with the employee to change their employment contract to allow them to be laid off or put on short-time working (this will not automatically give you the power to do this without their consent in the future)

Statutory guarantee payments

Employees are entitled to these if you do not provide them with a full day’s work during the time they’d normally be required to work.

The maximum payment is £30 a day for 5 days (£150) in any 3 months. If employees usually earn less than £30 a day, they’ll get their usual daily rate. For part-time workers, the rate is worked out proportionally.

Employees can claim a redundancy payment from you if the lay-off or short-time working runs for:

4 or more weeks in a row

6 or more weeks in a 13 week period, where no more than 3 are in a row

They must give you written notice in advance that they want to make a claim.

You do not have to pay if they’ll return to normal working hours within 4 weeks.

If you do not give guarantee pay to someone who’s entitled to it, they could take you to an employment tribunal.

There’s more advice on lay-offs and short-time working on the Acas (Advisory, Conciliation and Arbitration Service) website.

Non-compulsory redundancy

Voluntary redundancy

This is where you ask employees if they’d like to volunteer for redundancy.

You must have a fair and transparent selection process and tell employees they will not automatically be selected just because they applied.

Early retirement

This is where you offer employees incentives to retire early. It is used as an alternative to voluntary redundancy.

The offer must be made across the workforce - you cannot single out specific individuals.

You cannot force anyone into early retirement - it must be the employee’s choice.

Compulsory redundancy

If you decide you need to make compulsory redundancies, you must:

identify which employees will be made redundant

make sure you select people fairly - do not discriminate

Fair selection criteria

Fair reasons for selecting employees for redundancy include:

skills, qualifications and aptitude

standard of work and/or performance

attendance

disciplinary record

You can select employees based on their length of service (‘last in, first out’) but only if you can justify it. It could be indirect discrimination if it affects one group of people more than another.

Do not rely on length of service as your only selection criteria - this is likely to be age discrimination.

Unfair selection criteria

Some selection criteria are automatically unfair. You must not select an employee for redundancy based on any of the following reasons:

pregnancy, including all reasons relating to maternity

family, including parental leave, paternity leave (birth and adoption), adoption leave or time off for dependants

acting as an employee representative

acting as a trade union representative

joining or not joining a trade union

being a part-time or fixed-term employee

age, disability, gender reassignment, marriage and civil partnership, race, religion or belief, sex and sexual orientation

pay and working hours, including the Working Time Regulations, annual leave and the National Minimum Wage

You should always consult employees in a redundancy situation.

Redundancy consultations

You must follow ‘collective consultation’ rules if you’re making 20 or more employees redundant within any 90-day period at a single establishment.

There are no set rules to follow if there are fewer than 20 redundancies planned, but it’s good practice to fully consult employees and their representatives. An employment tribunal could decide that you’ve dismissed your staff unfairly if you do not.

Consultation does not have to end in agreement, but it must be carried out with a view to reaching it, including ways of avoiding or reducing the redundancies.

Collective consultation

Follow these steps.

You must notify the Redundancy Payments Service (RPS) before a consultation starts. The deadline depends on the number of proposed redundancies.

Consult with trade union representatives or elected employee representatives - or with staff directly if there are none.

Provide information to representatives or staff about the planned redundancies, giving representatives or staff enough time to consider them.

Respond to any requests for further information.

Give any affected staff termination notices showing the agreed leaving date.

Issue redundancy notices once the consultation is complete.

Notification

Notify RPS by filling in form HR1. Instructions on where to send it are on the form.

The deadline for notifying RPS depends on the number of proposed redundancies.

Number of proposed redundancies | When notification to RPS must be given

20 to 99 | 30 days before the first redundancy

100 or more | 45 days before the first redundancy

You can be fined an unlimited amount if you do not notify RPS.

Consultation

There’s no time limit on how long consultations last, but there is a minimum period before you can dismiss any employees.

Number of proposed redundancies | Minimum consultation period before dismissal

20 to 99 | 30 days

100 or more | 45 days

Information you must provide to representatives or staff

You must provide written details of:

the reasons for redundancies

the numbers and categories of employees involved

the numbers of employees in each category

how you plan to select employees for redundancy

how you’ll carry out redundancies

how you’ll work out redundancy payments

Further information

Download the guidance on how to manage collective redundancies from Advisory, Conciliation and Arbitration Service (Acas).

Giving staff notice

You must give staff notice and agree a leaving date once you’ve finished the redundancy consultations.

Give staff at least the statutory notice period, based on how long they have worked.

Length of service | Notice you must give

1 month to 2 years | At least a week

2 years to 12 years | A week’s notice for every year employed

12 or more years | 12 weeks

You can allow staff to leave earlier than the planned leaving date (for example without notice) by offering payment in lieu of notice.

Notice pay

You must give staff notice pay - based on their pay rate and notice period - or make a payment in lieu of notice.

Your employee’s notice pay is based on the average they earned per week over the 12 weeks before their notice period starts.

If your employee earned less than usual because you used the Coronavirus Job Retention Scheme to put them ‘on furlough’, you must work out their notice payments based on what they would have earned normally.

Pay in lieu of notice

If you have included a payment in lieu of notice clause in the employment contract, you can end your staff’s employment with no notice. This lets you make a payment to cover the notice period they would have worked.

These payments must have tax and National Insurance deducted.

When you make payments in lieu of notice, you still have to pay staff the basic pay they would have got during the notice period. You also have to pay pension, private health care insurance or other contributions if it’s in the employee’s contract.

Redundancy pay

Employees you make redundant might be entitled to redundancy pay - this is called a ‘statutory redundancy payment’.

To be eligible, an individual must:

be an employee working under a contract of employment

have at least 2 years’ continuous service

have been dismissed, laid off or put on short-time working - those who opted for early retirement do not qualify

You must make the payment when you dismiss the employee, or soon after.

A redundant employee also has the right to a written statement setting out the amount of redundancy payment and how you worked it out.

Statutory redundancy pay rates

These are based on an employee’s age and length of employment and are counted back from the date of dismissal.

Employees get:

1.5 weeks’ pay for each full year of employment after their 41st birthday

a week’s pay for each full year of employment after their 22nd birthday

half a week’s pay for each full year of employment up to their 22nd birthday

Length of service is capped at 20 years.

Your employee’s weekly pay is the average they earned per week over the 12 weeks before the day they got their redundancy notice.

If your employee earned less than usual because you used the Coronavirus Job Retention Scheme to put them ‘on furlough’, you must work out their redundancy payments based on what they would have earned normally.

Weekly pay is capped at £544. The maximum amount of statutory redundancy pay is £16,320.

Statutory redundancy pay rates may be different in Northern Ireland.

You can give your staff extra redundancy pay if you want to, or have a qualifying period of less than 2 years.

You can use the redundancy pay calculator to work out payments.

If you do not pay

If you fail to pay redundancy pay or if an employee disagrees with the amount, they have 3 months from the date their employment ended to make a claim for payment to an employment tribunal.

If an employee does not claim in time, a tribunal still has 6 months to decide whether or not they should get a payment.

If you have financial difficulties

If your business would become insolvent as a result of making the statutory redundancy payments, the Insolvency Service’s Redundancy Payments Service (RPS) may be able to help.

You’d have to repay any debt as soon as possible. Email the Redundancy Payments Service for more information. Include all of the following in your email:

your name

whether you’re the employer

whether you should be the main point of contact

the name of your business

your business address

number of redundancies

Tax

Employees who’ve been made redundant only pay tax on payments over £30,000. They do not pay any National Insurance.

Tax and National Insurance are deducted from other termination payments, for example payment in lieu of holiday or notice.

Getting help

If you have to make redundancies, Jobcentre Plus can give you and your employees support and advice through its Rapid Response Service.

Support could include:

helping people facing redundancy to write CVs and find jobs

providing general information about benefits

helping people to find the right training and learn new skills

helping with costs like travel to work expenses

Jobcentre Plus may also provide on-site support for large scale redundancies.

In Scotland, Rapid Response Service support is delivered through Partnership Action for Continuing Employment (PACE) - there’s more information on the Skills Development Scotland website.

In Wales, the service is delivered by the ReAct scheme.

Acas has an online redundancy helpline.

How to get help

To find out how your business can use the Rapid Response Service, email rrs.enquiries@dwp.gov.uk and include:

your contact details

the town(s) your business is based in (including postcodes)

the location(s) of the redundancies

Making staff redundant

Overview

Redundancy is when you dismiss an employee because you no longer need anyone to do their job. This might be because your business is:

changing what it does

doing things in a different way, for example using new machinery

changing location or closing down

For a redundancy to be genuine, you must demonstrate that the employee’s job will no longer exist.

Redundancies can be compulsory or non-compulsory. If you do have to make redundancies you can get help from Jobcentre Plus.

Employee rights

Employees have certain rights and may be entitled to redundancy pay if they’re made redundant.

All employees under notice of redundancy have the right to:

reasonable time off to look for a new job or arrange training

not be unfairly selected for redundancy

You should always take steps to avoid redundancies before dismissing staff.

Alternative employment

Employers must try to find suitable alternative employment within the organisation for employees they’ve made redundant.

Employees can try out an alternative role for 4 weeks (or more if agreed in writing) without giving up their right to redundancy pay.

Avoiding redundancies

You should take steps to avoid compulsory redundancies, for example by:

seeking applicants for voluntary redundancy or early retirement

seeking applications from existing staff to work flexibly

laying off self-employed contractors, freelancers etc

not using casual labour

restricting recruitment

reducing or banning overtime

filling vacancies elsewhere in the business with existing employees

short-time working or temporary lay-offs

Offers of alternative work

Even if you’ve selected someone for redundancy, you can still offer them alternative work.

For an offer to be valid:

it should be unconditional and in writing

it must be made before the employee’s current contract ends

it should show how the new job differs from the old

the job must actually be offered to the employee - they should not have to apply

the new job must start within 4 weeks of the old job ending

The trial period can be longer than 4 weeks if you agree this in writing.

If you think the job is suitable but the employee refuses to take it, they might lose any redundancy pay entitlement.

Lay-offs and short-time working

Short-time working is when an employee works reduced hours or is paid less than half a week’s pay.

Laying off staff or short-time working can help avoid redundancies - but you have to agree this with staff first.

This could be in:

their employment contract

a national agreement for the industry

a collective agreement between you and a recognised trade union

National and collective agreements can only be enforced if they’re in the employee’s employment contract.

You may also be able to lay off an employee or put them on short-time working:

where you have clear evidence showing it’s been widely accepted in your organisation over a long period of time

Statutory guarantee payments

Employees are entitled to these if you do not provide them with a full day’s work during the time they’d normally be required to work.

Employees can claim a redundancy payment from you if the lay-off or short-time working runs for:

4 or more weeks in a row

6 or more weeks in a 13 week period, where no more than 3 are in a row

They must give you written notice in advance that they want to make a claim.

You do not have to pay if they’ll return to normal working hours within 4 weeks.

If you do not give guarantee pay to someone who’s entitled to it, they could take you to an employment tribunal.

There’s more advice on lay-offs and short-time working on the Acas (Advisory, Conciliation and Arbitration Service) website.

Non-compulsory redundancy

Voluntary redundancy

This is where you ask employees if they’d like to volunteer for redundancy.

You must have a fair and transparent selection process and tell employees they will not automatically be selected just because they applied.

Early retirement

This is where you offer employees incentives to retire early. It is used as an alternative to voluntary redundancy.

The offer must be made across the workforce - you cannot single out specific individuals.

You cannot force anyone into early retirement - it must be the employee’s choice.

Compulsory redundancy

If you decide you need to make compulsory redundancies, you must:

identify which employees will be made redundant

make sure you select people fairly - do not discriminate

Fair selection criteria

Fair reasons for selecting employees for redundancy include:

skills, qualifications and aptitude

standard of work and/or performance

attendance

disciplinary record

Do not rely on length of service as your only selection criteria - this is likely to be age discrimination.

Unfair selection criteria

Some selection criteria are automatically unfair. You must not select an employee for redundancy based on any of the following reasons:

pregnancy, including all reasons relating to maternity

family, including parental leave, paternity leave (birth and adoption), adoption leave or time off for dependants

acting as an employee representative

acting as a trade union representative

joining or not joining a trade union

being a part-time or fixed-term employee

age, disability, gender reassignment, marriage and civil partnership, race, religion or belief, sex and sexual orientation

pay and working hours, including the Working Time Regulations, annual leave and the National Minimum Wage

You should always consult employees in a redundancy situation.

Redundancy consultations

Collective consultation

Follow these steps.

Consult with trade union representatives or elected employee representatives - or with staff directly if there are none.

Respond to any requests for further information.

Give any affected staff termination notices showing the agreed leaving date.

Issue redundancy notices once the consultation is complete.

Notification

Notify RPS by filling in form HR1. Instructions on where to send it are on the form.

The deadline for notifying RPS depends on the number of proposed redundancies.

Number of proposed redundancies | When notification to RPS must be given

20 to 99 | 30 days before the first redundancy

100 or more | 45 days before the first redundancy

You can be fined an unlimited amount if you do not notify RPS.

Consultation

There’s no time limit on how long consultations last, but there is a minimum period before you can dismiss any employees.

Number of proposed redundancies | Minimum consultation period before dismissal

20 to 99 | 30 days

100 or more | 45 days

Information you must provide to representatives or staff

You must provide written details of:

the reasons for redundancies

the numbers and categories of employees involved

the numbers of employees in each category

how you plan to select employees for redundancy

how you’ll carry out redundancies

how you’ll work out redundancy payments

Further information

Download the guidance on how to manage collective redundancies from Advisory, Conciliation and Arbitration Service (Acas).

Giving staff notice

You must give staff notice and agree a leaving date once you’ve finished the redundancy consultations.

Give staff at least the statutory notice period, based on how long they have worked.

Length of service | Notice you must give

1 month to 2 years | At least a week

2 years to 12 years | A week’s notice for every year employed

12 or more years | 12 weeks

You can allow staff to leave earlier than the planned leaving date (for example without notice) by offering payment in lieu of notice.

Notice pay

You must give staff notice pay - based on their pay rate and notice period - or make a payment in lieu of notice.

Your employee’s notice pay is based on the average they earned per week over the 12 weeks before their notice period starts.

Pay in lieu of notice

These payments must have tax and National Insurance deducted.

Redundancy pay

Employees you make redundant might be entitled to redundancy pay - this is called a ‘statutory redundancy payment’.

To be eligible, an individual must:

be an employee working under a contract of employment

have at least 2 years’ continuous service

have been dismissed, laid off or put on short-time working - those who opted for early retirement do not qualify

You must make the payment when you dismiss the employee, or soon after.

A redundant employee also has the right to a written statement setting out the amount of redundancy payment and how you worked it out.

Statutory redundancy pay rates

These are based on an employee’s age and length of employment and are counted back from the date of dismissal.

Employees get:

1.5 weeks’ pay for each full year of employment after their 41st birthday

a week’s pay for each full year of employment after their 22nd birthday

half a week’s pay for each full year of employment up to their 22nd birthday

Length of service is capped at 20 years.

Your employee’s weekly pay is the average they earned per week over the 12 weeks before the day they got their redundancy notice.

Weekly pay is capped at £544. The maximum amount of statutory redundancy pay is £16,320.

Statutory redundancy pay rates may be different in Northern Ireland.

You can give your staff extra redundancy pay if you want to, or have a qualifying period of less than 2 years.

You can use the redundancy pay calculator to work out payments.

If you do not pay

If an employee does not claim in time, a tribunal still has 6 months to decide whether or not they should get a payment.

If you have financial difficulties

your name

whether you’re the employer

whether you should be the main point of contact

the name of your business

your business address

number of redundancies

Tax

Employees who’ve been made redundant only pay tax on payments over £30,000. They do not pay any National Insurance.

Tax and National Insurance are deducted from other termination payments, for example payment in lieu of holiday or notice.

Getting help

If you have to make redundancies, Jobcentre Plus can give you and your employees support and advice through its Rapid Response Service.

Support could include:

helping people facing redundancy to write CVs and find jobs

providing general information about benefits

helping people to find the right training and learn new skills

helping with costs like travel to work expenses

Jobcentre Plus may also provide on-site support for large scale redundancies.

In Wales, the service is delivered by the ReAct scheme.

Acas has an online redundancy helpline.

How to get help

To find out how your business can use the Rapid Response Service, email rrs.enquiries@dwp.gov.uk and include:

your contact details

the town(s) your business is based in (including postcodes)

the location(s) of the redundancies

Making staff redundant

Overview

Redundancy is when you dismiss an employee because you no longer need anyone to do their job. This might be because your business is:

changing what it does

doing things in a different way, for example using new machinery

changing location or closing down

For a redundancy to be genuine, you must demonstrate that the employee’s job will no longer exist.

Redundancies can be compulsory or non-compulsory. If you do have to make redundancies you can get help from Jobcentre Plus.

Employee rights

Employees have certain rights and may be entitled to redundancy pay if they’re made redundant.

All employees under notice of redundancy have the right to:

reasonable time off to look for a new job or arrange training

not be unfairly selected for redundancy

You should always take steps to avoid redundancies before dismissing staff.

Alternative employment

Employers must try to find suitable alternative employment within the organisation for employees they’ve made redundant.

Employees can try out an alternative role for 4 weeks (or more if agreed in writing) without giving up their right to redundancy pay.

Avoiding redundancies

You should take steps to avoid compulsory redundancies, for example by:

seeking applicants for voluntary redundancy or early retirement

seeking applications from existing staff to work flexibly

laying off self-employed contractors, freelancers etc

not using casual labour

restricting recruitment

reducing or banning overtime

filling vacancies elsewhere in the business with existing employees

short-time working or temporary lay-offs

Offers of alternative work

Even if you’ve selected someone for redundancy, you can still offer them alternative work.

For an offer to be valid:

it should be unconditional and in writing

it must be made before the employee’s current contract ends

it should show how the new job differs from the old

the job must actually be offered to the employee - they should not have to apply

the new job must start within 4 weeks of the old job ending

The trial period can be longer than 4 weeks if you agree this in writing.

If you think the job is suitable but the employee refuses to take it, they might lose any redundancy pay entitlement.

Lay-offs and short-time working

Short-time working is when an employee works reduced hours or is paid less than half a week’s pay.

Laying off staff or short-time working can help avoid redundancies - but you have to agree this with staff first.

This could be in:

their employment contract

a national agreement for the industry

a collective agreement between you and a recognised trade union

National and collective agreements can only be enforced if they’re in the employee’s employment contract.

You may also be able to lay off an employee or put them on short-time working:

where you have clear evidence showing it’s been widely accepted in your organisation over a long period of time

Statutory guarantee payments

Employees are entitled to these if you do not provide them with a full day’s work during the time they’d normally be required to work.

Employees can claim a redundancy payment from you if the lay-off or short-time working runs for:

4 or more weeks in a row

6 or more weeks in a 13 week period, where no more than 3 are in a row

They must give you written notice in advance that they want to make a claim.

You do not have to pay if they’ll return to normal working hours within 4 weeks.

If you do not give guarantee pay to someone who’s entitled to it, they could take you to an employment tribunal.

There’s more advice on lay-offs and short-time working on the Acas (Advisory, Conciliation and Arbitration Service) website.

Non-compulsory redundancy

Voluntary redundancy

This is where you ask employees if they’d like to volunteer for redundancy.

You must have a fair and transparent selection process and tell employees they will not automatically be selected just because they applied.

Early retirement

This is where you offer employees incentives to retire early. It is used as an alternative to voluntary redundancy.

The offer must be made across the workforce - you cannot single out specific individuals.

You cannot force anyone into early retirement - it must be the employee’s choice.

Compulsory redundancy

If you decide you need to make compulsory redundancies, you must:

identify which employees will be made redundant

make sure you select people fairly - do not discriminate

Fair selection criteria

Fair reasons for selecting employees for redundancy include:

skills, qualifications and aptitude

standard of work and/or performance

attendance

disciplinary record

Do not rely on length of service as your only selection criteria - this is likely to be age discrimination.

Unfair selection criteria

Some selection criteria are automatically unfair. You must not select an employee for redundancy based on any of the following reasons:

pregnancy, including all reasons relating to maternity

family, including parental leave, paternity leave (birth and adoption), adoption leave or time off for dependants

acting as an employee representative

acting as a trade union representative

joining or not joining a trade union

being a part-time or fixed-term employee

age, disability, gender reassignment, marriage and civil partnership, race, religion or belief, sex and sexual orientation

pay and working hours, including the Working Time Regulations, annual leave and the National Minimum Wage

You should always consult employees in a redundancy situation.

Redundancy consultations

Collective consultation

Follow these steps.

Consult with trade union representatives or elected employee representatives - or with staff directly if there are none.

Respond to any requests for further information.

Give any affected staff termination notices showing the agreed leaving date.

Issue redundancy notices once the consultation is complete.

Notification

Notify RPS by filling in form HR1. Instructions on where to send it are on the form.

The deadline for notifying RPS depends on the number of proposed redundancies.

Number of proposed redundancies | When notification to RPS must be given

20 to 99 | 30 days before the first redundancy

100 or more | 45 days before the first redundancy

You can be fined an unlimited amount if you do not notify RPS.

Consultation

There’s no time limit on how long consultations last, but there is a minimum period before you can dismiss any employees.

Number of proposed redundancies | Minimum consultation period before dismissal

20 to 99 | 30 days

100 or more | 45 days

Information you must provide to representatives or staff

You must provide written details of:

the reasons for redundancies

the numbers and categories of employees involved

the numbers of employees in each category

how you plan to select employees for redundancy

how you’ll carry out redundancies

how you’ll work out redundancy payments

Further information

Download the guidance on how to manage collective redundancies from Advisory, Conciliation and Arbitration Service (Acas).

Giving staff notice

You must give staff notice and agree a leaving date once you’ve finished the redundancy consultations.

Give staff at least the statutory notice period, based on how long they have worked.

Length of service | Notice you must give

1 month to 2 years | At least a week

2 years to 12 years | A week’s notice for every year employed

12 or more years | 12 weeks

You can allow staff to leave earlier than the planned leaving date (for example without notice) by offering payment in lieu of notice.

Notice pay

You must give staff notice pay - based on their pay rate and notice period - or make a payment in lieu of notice.

Your employee’s notice pay is based on the average they earned per week over the 12 weeks before their notice period starts.

Pay in lieu of notice

These payments must have tax and National Insurance deducted.

Redundancy pay

Employees you make redundant might be entitled to redundancy pay - this is called a ‘statutory redundancy payment’.

To be eligible, an individual must:

be an employee working under a contract of employment

have at least 2 years’ continuous service

have been dismissed, laid off or put on short-time working - those who opted for early retirement do not qualify

You must make the payment when you dismiss the employee, or soon after.

A redundant employee also has the right to a written statement setting out the amount of redundancy payment and how you worked it out.

Statutory redundancy pay rates

These are based on an employee’s age and length of employment and are counted back from the date of dismissal.

Employees get:

1.5 weeks’ pay for each full year of employment after their 41st birthday

a week’s pay for each full year of employment after their 22nd birthday

half a week’s pay for each full year of employment up to their 22nd birthday

Length of service is capped at 20 years.

Your employee’s weekly pay is the average they earned per week over the 12 weeks before the day they got their redundancy notice.

Weekly pay is capped at £544. The maximum amount of statutory redundancy pay is £16,320.

Statutory redundancy pay rates may be different in Northern Ireland.

You can give your staff extra redundancy pay if you want to, or have a qualifying period of less than 2 years.

You can use the redundancy pay calculator to work out payments.

If you do not pay

If an employee does not claim in time, a tribunal still has 6 months to decide whether or not they should get a payment.

If you have financial difficulties

your name

whether you’re the employer

whether you should be the main point of contact

the name of your business

your business address

number of redundancies

Tax

Employees who’ve been made redundant only pay tax on payments over £30,000. They do not pay any National Insurance.

Tax and National Insurance are deducted from other termination payments, for example payment in lieu of holiday or notice.

Getting help

If you have to make redundancies, Jobcentre Plus can give you and your employees support and advice through its Rapid Response Service.

Support could include:

helping people facing redundancy to write CVs and find jobs

providing general information about benefits

helping people to find the right training and learn new skills

helping with costs like travel to work expenses

Jobcentre Plus may also provide on-site support for large scale redundancies.

In Wales, the service is delivered by the ReAct scheme.

Acas has an online redundancy helpline.

How to get help

To find out how your business can use the Rapid Response Service, email rrs.enquiries@dwp.gov.uk and include:

your contact details

the town(s) your business is based in (including postcodes)

the location(s) of the redundancies


I have inherited a former barn as part of my father's farm in the Yorkshire Dales, England. I intend to convert this into a 2-bedroom holiday cottage for tourist use; however, it does not have a connection to the sewage network and the area is classed as a Groundwater Protection Zone, suggesting that a Cesspool may be required. What are the rules regarding the capacity of such a cesspool?

You must:

Septic tanks and treatment plants: permits and general binding rules

Overview

If your house or business is not connected to the mains sewer, your sewage will go to one of the following:

a septic tank - an underground tank where the solids sink to the bottom and the liquid flows out and soaks through the ground

a small sewage treatment plant (also known as a package treatment plant) - a part-mechanical system that treats the liquid so it’s clean enough to go into a river or stream

a cesspool (also called a cesspit) - a sealed tank that collects the sewage

a non-standard system, such as a reed bed or trench arch system

There are different rules for septic tanks and treatment plants in Northern Ireland, Scotland and Wales.

You have a non-standard system

You must contact the Environment Agency to find out if you need a permit.

You have a septic tank or small sewage treatment plant

As the ‘operator’ of a septic tank or small sewage treatment plant you must check you meet the general binding rules. You must apply for a permit if you do not.

You’re an operator if any of the following is true:

you own the property that uses the system

you own a property that shares the system with other properties - each property owner is an operator, and you’re jointly responsible for complying with the general binding rules

you have a written agreement with the property owner that says you’re responsible for the system’s maintenance, for example you’re renting and it’s in your tenancy agreement

Contact the Environment Agency if you’re not sure whether you’re an operator.

The general binding rules

You must follow the general binding rules if you’re the operator of a septic tank or small sewage treatment plant.

The sewage must:

be domestic in nature, for example from a toilet, bathroom, shower or kitchen of a house, flat or business (such as a pub, hotel or office) - contact the Environment Agency if you’re not sure if the sewage is domestic in nature

not cause pollution - find out how to check for pollution

There are other rules depending on whether you’re releasing this sewage:

to the ground, for example in your back garden

to a surface water, for example a river or stream

Ask your local installation or maintenance company if you’re not sure what sort of system you have.

Releasing to the ground

You must use a septic tank or a small sewage treatment plant and a drainage field (infiltration system).

You must apply for a permit if you release (‘discharge’):

to a well, borehole or other deep structure

more than 2 cubic metres (2,000 litres) per day

in a groundwater source protection zone (SPZ1)

You must also read the additional rules for discharging sewage to the ground.

Calculate how much sewage you discharge

For sewage from a residential property, use the calculator to work out how much you discharge per day.

For commercial properties (such as a hotel, restaurant or office) or holiday accommodation (such as a cottage or chalet), use British Water’s flows and loads guidance or contact the Environment Agency for advice.

Work out if you’re in a groundwater source protection zone 1 (SPZ1)

An SPZ1 can be either:

the area around a commercial water supply shown on the map of protected zones - check whether your discharge is in the inner zone (Zone 1) or ask the Environment Agency

any area within 50 metres of a private water supply for human consumption - ask your neighbours if they have a spring, well or borehole, and how far it is from your drainage field

Releasing to a surface water

You must use a small sewage treatment plant. You must apply for a permit if you’re discharging more than 5 cubic metres (5,000 litres) per day. Use the calculator to work out how much you discharge per day.

You must also read the additional rules for discharging sewage to a surface water.

Installing a new system

You must have building regulations approval. You may also need planning permission.

Check with your local council.

If you did not get permission and approval

You must apply retrospectively for building regulations approval. You may also need planning permission.

If your system was installed before 1 January 2015, you should contact your local council for advice.

Apply for a permit

You’ll need a permit if you do not meet the general binding rules.

The form you need to fill in depends on:

where you discharge the sewage

how much you discharge

If you discharge sewage to ground

There are different forms depending on whether you’re in a groundwater protection zone (SPZ1).

Outside an SPZ1

There are different forms if you discharge:

between 2 and 15 cubic metres per day

over 15 cubic metres per day

Inside an SPZ1

If you discharge less than 2 cubic metres per day there are different forms:

for systems in use before 1 January 2015

for those installed on or after 1 January 2015

between 2 and 15 cubic metres per day

over 15 cubic metres per day

If you discharge sewage to a surface water

If you discharge between 5 and 20 cubic metres per day, check if you can apply for a standard rules permit.

If you cannot get a standard rules permit, you’ll need a permit to discharge:

up to 20 cubic metres

over 20 cubic metres

Before you start

You need:

the 8-figure grid reference for your septic tank or treatment plant and the point where it discharges

to calculate the largest amount you’re likely to discharge - use one of the calculators in the chapter on the general binding rules

to provide a suitable site plan – see an example site plan

Application fees

Your application fee depends on whether your site is a domestic household, charity or another type of organisation.

You’re discharging to ground

The application fee for domestic households and charities to discharge up to 5,000 litres (5 cubic metres) per day is £125.

The fees are different for other organisations.

Size of discharge per day | Fee

Up to 15,000 litres (15 cubic metres) | £2,708

Over 15,000 litres (15 cubic metres) | £5,699

Any volume that contains specific substances | £6,052

You’re discharging to a surface water

Size of discharge per day | Fee

Up to 5,000 litres (5 cubic metres) | £2,534

Between 5,000 litres (5 cubic metres) and 50,000 litres (50 cubic metres) | £4,170

Any volume that contains specific substances | £7,649

Annual fees

There’s an annual subsistence fee for sites that are not domestic households or charities.

Size of discharge per day | Fee

Up to 5,000 litres | £251

Between 5,000 litres and 20,000 litres with operator self monitoring | £823

Between 5,000 litres and 20,000 litres | £890

Between 20,000 litres and 50,000 litres with operator self monitoring | £1,310

How long it takes

You should get a decision on your application within 13 weeks.

You’ll be told if your application may take longer, for example because of planning issues.

Your application is refused

If your application is refused, you’ll be told:

the reasons for refusal

how you can appeal

Complying with your permit

See the guidance on how to comply with your permit, including maintenance, record keeping and pollution reporting requirements.

Get help

You can ask the Environment Agency for help with your application.

You have a cesspool

You do not have to comply with the general binding rules or apply for a permit.

You must maintain your cesspool and make sure it:

is emptied regularly (for example once a month) by a registered waste carrier

does not leak or overflow

The Environment Agency or your local council can make you repair or replace your cesspool if it’s in poor condition.

If you install a new cesspool

You must:

get planning permission and building regulations approval

make sure it has a minimum capacity of 18,000 litres per 2 users (plus another 6,800 litres per each extra user)

Contact

Overview

a cesspool (also called a cesspit) - a sealed tank that collects the sewage

a non-standard system, such as a reed bed or trench arch system

You have a non-standard system

You must contact the Environment Agency to find out if you need a permit.

You have a septic tank or small sewage treatment plant

You’re an operator if any of the following is true:

you own the property that uses the system

Contact the Environment Agency if you’re not sure whether you’re an operator.

The general binding rules

The sewage must:

not cause pollution - find out how to check for pollution

There are other rules depending on whether you’re releasing this sewage:

to the ground, for example in your back garden

to a surface water, for example a river or stream

Releasing to the ground

You must apply for a permit if you release (‘discharge’):

to a well, borehole or other deep structure

more than 2 cubic metres (2,000 litres) per day

in a groundwater source protection zone (SPZ1)

You must also read the additional rules for discharging sewage to the ground.

Calculate how much sewage you discharge

Work out if you’re in a groundwater source protection zone 1 (SPZ1)

An SPZ1 can be either:

Releasing to a surface water

Installing a new system

Check with your local council.

If you did not get permission and approval

Apply for a permit

You’ll need a permit if you do not meet the general binding rules.

The form you need to fill in depends on:

where you discharge the sewage

how much you discharge

If you discharge sewage to ground

Outside an SPZ1

There are different forms if you discharge:

between 2 and 15 cubic metres per day

over 15 cubic metres per day

Inside an SPZ1

If you discharge less than 2 cubic metres per day there are different forms:

for systems in use before 1 January 2015

for those installed on or after 1 January 2015

between 2 and 15 cubic metres per day

over 15 cubic metres per day

If you discharge sewage to a surface water

If you cannot get a standard rules permit, you’ll need a permit to discharge:

up to 20 cubic metres

over 20 cubic metres

Before you start

You need:

to provide a suitable site plan – see an example site plan

Application fees

You’re discharging to ground

The fees are different for other organisations.

Size of discharge per day | Fee

Up to 15,000 litres (15 cubic metres) | £2,708

Over 15,000 litres (15 cubic metres) | £5,699

Any volume that contains specific substances | £6,052

You’re discharging to a surface water

Size of discharge per day | Fee

Up to 5,000 litres (5 cubic metres) | £2,534

Any volume that contains specific substances | £7,649

Annual fees

Size of discharge per day | Fee

Up to 5,000 litres | £251

Between 5,000 litres and 20,000 litres with operator self monitoring | £823

Between 5,000 litres and 20,000 litres | £890

Between 20,000 litres and 50,000 litres with operator self monitoring | £1,310

How long it takes

You should get a decision on your application within 13 weeks.

Your application is refused

If your application is refused, you’ll be told:

the reasons for refusal

how you can appeal

Complying with your permit

Get help

You can ask the Environment Agency for help with your application.

You have a cesspool

You do not have to comply with the general binding rules or apply for a permit.

You must maintain your cesspool and make sure it:

is emptied regularly (for example once a month) by a registered waste carrier

does not leak or overflow

If you install a new cesspool

You must:

get planning permission and building regulations approval

Contact