Redundancy and unemployment support

What is redundancy?

The first point to be made is that a person is not made redundant, rather their post is. This basic principle underpins the statutory processes for redundancy. Posts are made redundant when an employer reduces their workforce, and there requires to be a justifiable reason why redundancies occur, such as:

• The employer is ceasing business altogether, ie the employer will cease to exist
• The employer is closing the branch or workplace, for example, the employer is reducing the number of geographic locations in which offices are sited
• The employer has less need for the kind of work undertaken than was previously the case, for example, a particular type of practice area is no longer profitable

Within the legal sector, there are examples of all three of these instances happening since the start of the economic downturn in 2008. If your employer is contemplating redundancy, a reason for this will need to be provided to you.

If your post is being made redundant, then you will be held to have been dismissed by reason of redundancy.

The basic requirements for employers

There are statutory provisions for employers contemplating redundancies, and these include:

• Consultation requirements which vary according to the number of redundancies being contemplated. For example, if the employer envisages fewer than 20 posts being made redundant, then there is no statutory timescale for the consultation process. There is a sliding scale for a consultation timetable for numbers of redundancies above 20
• If an employer considers they require to make redundancies, they must ensure that dismissals by reason of redundancy are substantively and procedurally fair
• Any redundancies must also conform to discrimination legislation, i.e. an employer cannot select people for redundancy based on their gender, race, disability, religion or belief, sexuality, pregnancy, membership of a trade union, or age (unless they can justify this objectively)

How does my employer ensure redundancies are substantively and procedurally fair?

To be substantively fair means that the employer can show that the redundancies are a genuine reaction to the economic business circumstances, and that selection of the posts for redundancy has taken place using criteria that are objective and fair.

To be procedurally fair means that your employer has consulted those affected in a meaningful way, and has communicated properly. The employer needs to consider any suggestions you or others potentially affected may make to avoid redundancies, and also needs to consider any concessions you may wish to make such as a reduction in hours. Bear in mind that this works both ways: your employer may suggest changes in your contractual conditions such as a reduction in hours or salary. In such circumstances, any proposal to change the terms of your contract can only be lawful if you agree to them. Some of your terms of employment will be clearly stated in your formal contract of employment, but there may be others that are either implied or have gradually evolved through custom and practice.

In circumstances where there is a number of employees carrying out broadly similar duties and the employer is proposing to reduce that number (as opposing to stop carrying out this area of work and so making all affected posts redundant) then a selection process for redundancy will need to be developed. Your employer will need to consult you on the “redundancy pool”, i.e. those potentially affected, and will need to publish to those affected the criteria that will be used. The criteria to be used may vary from factual information (e.g. attendance record and timekeeping as well as fees earned) to more subjective elements (such as knowledge and application of the relevant area of law).

At each stage of the redundancy process your employer should ensure you are informed of timescales, what to do if you disagree with any aspect of the process and what the implications are.

If, after going through the process, you are informed that your post is being made redundant, your employer is obliged to inform you of the appeals process, including timescales and who will determine the outcome of any appeal you make. This is a statutory requirement.

Your entitlements in the event of your post being made redundant

There are statutory entitlements as regards payments you can expect to receive, assuming you are an employee and that you have worked for your employer for at least two years (including any parental leave). Redundancy pay is not usually taxable up to a maximum limit.Redundancy pay is calculated as being: 

• 1.5 weeks’ pay for each year of employment after your 41st birthday
• a week’s pay for each year of employment after your 22nd birthday
• half a week’s pay for each year of employment up to your 22nd birthday

A statutory maximum limit for a week’s pay exists and is usually set annually.  There is also a cap on length of service, which is 20 years, as well as a maximum amount of redundancy pay, again set annually.

Regardless of the statutory allowances, many employers will exceed these. Some will publish their redundancy processes, including what employees can expect should their posts be made redundant. Examples of ways in which an employer may vary the statutory provisions are:

• Reducing or eliminating the two year qualifying period for redundancy pay
• Ignoring the current statutory limit

If your post may be made redundant you should check to ascertain whether there are any published indications of what your employer offers by way of enhanced redundancy payments.

If your post is made redundant with immediate effect, then you will also be entitled to receive your salary for your contractual notice period. However, this payment of salary for notice will be liable to tax, unlike redundancy pay itself.

Compromise agreements

Sometimes, particularly if you hold a senior post within your organisation, your employer may offer you the option of a compromise agreement. The purpose of such an agreement is to provide you with a payment in return for your agreement to confidentiality about the circumstances of your redundancy and your agreeing not to make any future claim against your employer in relation to your redundancy. For a compromise agreement to be lawful you must be given access to independent advice from an employment lawyer.

Sources of further advice

If you are concerned that your employer may be contemplating redundancies, or if you are already aware that a redundancy process is in progress, there are various sources of advice. There are several online redundancy pay calculators so you can work out what the statutory amount of redundancy pay will be for you – you will need to know your start date with your employer and your current salary. In addition, the ACAS website offers a good description of redundancy guidelines.

If your post has been, or is, being made redundant, it is all too easy to focus on the immediate concerns, and for some affected by redundancy it is very natural to be introspective and to avoid thinking about future career options.

While this is entirely understandable, focussing on how to pursue a possible new job or career can help minimise those moments of self doubt and loss of self confidence that can manifest themselves as a result of being made redundant.

An invaluable site for those in the legal sector affected by redundancy is LawCare, a charity registered in Scotland as well as in England and Wales. The prime focus of the charity is to provide support and advice to help lawyers and their families to deal with health issues (including depression, stress and emotional difficulties), and it is possible that you may suffer some health symptoms as a result of facing redundancy. There is also a very useful section on their website covering steps to consider when looking for a new job, whether or not that is to be in the legal profession.

A link to this part of their website is: Moving on from the Law.

This section now lists some of the main steps you should think about when looking for a new post, and is intended to act as a prompt for you. You can find much advice on the subjects covered by looking at the LawCare site and others.

Registering with agencies and online job sites

There are many online job sites that you can register with and receive details of relevant jobs – you can refine your search so that you are emailed details of jobs that contain specific words such as 'solicitor', as well as those attracting a specific level of salary or those located geographically where you are prepared to work.

There are also some (generally larger) organisations / firms that may allow you to register with them so that you are advised by email of any relevant vacancies that occur. If there are particular firms or organisations in which you are especially interested you might want to check with them whether they provide such a service.

Registering with online job sites and with agencies will require you to update your CV. Make sure you agree with your employer the nature of any reference they will give you when looking for a new job.

Your CV

Particularly in this competitive time it is essential that your CV is as impressive and individual as possible so that it will stand up against others. It is worth taking some time to get this right, and asking any professional friends you have to cast a dispassionate eye over it. A good CV should be well laid out, correctly punctuated and with no spelling errors. It should be accurate and also it should be very much to the point as many recruiters will prefer compact CVs. There are different views on an optimum length for a CV, and to some extent this may depend on your seniority and also the post you are applying for, but two sides of A4 would fit most circumstances, and many would advise you that a CV should not be longer than three sides of A4.

If you have an up to date CV that you use as your 'template' you can then adapt it for any specific post that you are interested in. It needn’t take long to tailor an existing CV so that the recruiter does not feel that you are simply sending his or her organisation the same CV that has been sent elsewhere. If you are also sending CVs speculatively as opposed to for a particular post or registering with an agency,  make sure your CV is relevant to the particular organisation. The majority of organisations have a section on their website about recruitment and make sure you follow any advice provided. Please do not send your CV to organisations that specifically say they do not accept speculative CVs.

When updating your CV, bear in mind that the vast majority of employers now use some form of competency based recruitment, which means they are looking for evidence of what you have achieved.

We offer a free online CPD webinar on competency-based recruitment that may help you with this aspect of finding a job. Although it is focussed on senior posts, the principles remain valid for all posts using competency-based selection. You can access the free webinar here: https://www.eiseverywhere.com/ehome/220295&.

For some posts, especially those in the public sector, CVs will not be accepted and, instead, you will have to complete an application form. This can be a time consuming process, especially if you are applying for a number of posts. Consider again the competency based process in completing any statement in support of your application, so that you focus on demonstrating your achievements in the key areas for the post concerned. Also make sure that, in summarising your roles and responsibilities in previous posts, you highlight areas that are especially relevant to the post for which you are applying. Once again, try to show the application form to someone else before sending it, but at the very least put it to one side and come back to it fresh so you can spot any errors yourself.

Who do you know that might help you?

At the same time as updating and refining your CV, also think about friends and professional acquaintances who might be of use to you. Many are still reticent about using such contacts, and possibly embarrassed about disclosing information about redundancy, but redundancies in the legal profession are so much more common than before. You should hopefully find a great deal of understanding and a willingness to help you if at all possible. In many cases you might want to ask your contacts to let you know of any opportunities they hear of that might be of interest for you. Such contacts might also be useful for taking a look at your revised CV.

Before meeting any contact, prepare for the meeting as you would a job interview, even if you know the contact or friend well. You need to think about what you want to get out of the meeting and also make sure you are able to describe succinctly what your relevant experience and skills are (again, depending on how well the person knows you).

Attending Interviews

If you are successful in being offered an interview, it is worthwhile thinking about your interview technique in advance, especially if it has been many years since you have been in this situation. As has already been pointed out, the majority of employers now tend to use a competency based recruitment process. In interview this means that they are less likely to ask hypothetical “what if” questions, and instead will ask questions that call on you to demonstrate actual achievements in such a way that hopefully allows you to demonstrate you have the required skills and experience. If you are registered with an agency, the agency will seek to confirm with the interviewing team what type of interview they will be conducting. Larger organisations and those in the public sector will usually make clear the format of interviews in advance. 

Free advice on interview technique is contained in the Society’s online webinar aimed at those seeking their first legally qualified post. Many of the principles are the same for any interview you might be attending, and will be good preparation for any first interview post redundancy. Register using the following link to access the training https://www.eiseverywhere.com/ehome/220250&

Some of the things you should think about in advance are:

• If there are any time gaps or other areas of uncertainty about your past employment, think carefully what to say about these areas.
• How best to describe your unique qualities and what you have achieved – think especially about what you have included on your CV or application form and don’t repeat information needlessly. Make sure you expand and also add extra information to show you have “strength in depth”. Make sure also that you tailor your responses to the skills, qualities and experience needed for the particular post.
• What to say about your redundancy – be honest but also try to refrain from being negative about your past employer.
• Think of relevant and intelligent questions to ask, and always have at least one question in reserve in case what you had planned to ask is covered in the interview.
• Make sure you have researched as much as possible about the organisation and also, if you know who is interviewing you, about them as well. 

Once you are in the interview, a few more hints on good practice: 

• Body language is important, as is eye contact – especially as the majority of interviews will have a panel of two of three. Make sure you maintain eye contact and are inclusive of all those interviewing you.
• Try to judge how long your answers should be, hitting the balance between being too brief and starting to go into too much detail or repeating yourself. The body language of the interviewers may assist in helping you judge if your answers are of the expected length.
• Expect the unexpected! Some may ask you an unpredictable question to judge your ability to think on your feet. Never be afraid in such circumstances to ask for a brief moment to think about your answer – but don’t allow the silence to go on too long!

If you have not been interviewed for a post for many years, it would be good to have a mock interview with a friend or professional acquaintance. Some agencies offer interview practice as part of their service to you.

One of the difficulties facing a solicitor whose post has been made redundant is making sure finances are properly managed. While some employers pay more than the statutory redundancy amounts, others do not. In any case, depending on your circumstances and financial commitments, you will need to consider how you can manage your finances as economically and effectively as possible.

Tax

Depending on your salary level and the stage in the tax year when your redundancy takes place, it may be possible to obtain assistance from HMRC in reducing your liability for income tax. If, for example, your redundancy has taken place relatively early in the tax year, but you have received salary for your notice period (which will be taxed at whatever level is appropriate for your previous circumstances) it may be possible for HMRC to consider repaying some of the tax that has been deducted from your final salary payment – on the basis that at this stage you have no guarantee of further salary income during the tax year. This possibility is particularly relevant if you were paying income tax at one of the higher levels.

Claiming Benefits

You may well have thought you would never be in a position where you would be contemplating claiming benefits, but you may well be entitled to certain state benefits as a result of your redundancy.

The nature and eligibility for benefits is changing regularly and your best source of up to date advice is probably from the Citizens Advice Scotland. They provide up to date advice on what you may be entitled to.

The UK government website will provide up to date information on the various benefits available.

In order to claim any benefits, make sure you have full information on your finances, including any savings that you / your spouse or partner have, as this may affect your entitlements. For example, if you have £16,000 in savings you may not be entitled to jobseekers allowance either at all or for any longer than a period of 6 months, depending on your circumstances.

Many Solicitors will never have had to “sign on” at a Job Centre and may find the thought of this difficult to contemplate. However, most people in receipt of Jobseekers Allowance do require to go physically to their nearest Job Centre regularly, and to be able to demonstrate that they have been actively seeking alternative employment. If you do qualify for Jobseekers Allowance it is normal for an agreement to be reached on the sort of job that would be appropriate for your own situation. 

The best advice is to ensure that you do indeed claim for any benefit to which you are entitled, and to use the various websites available to contact the right people to advise you on any point that is unclear.

If the savings threshold applies to you it would be sensible to work out an expenditure plan so that if and when your savings reduce below the threshold, you can look at your position and eligibility for benefits again.

Managing Expenditure and Debt.

No matter how carefully you manage expenditure post redundancy, there is clearly a danger of falling into debt. You may already have commitments such as a mortgage, school fees or credit card debt, and if you do not have redundancy protection or other insurance, you may experience problems.

The main steps to consider are in many ways common sense, but nevertheless worth stating here as in the aftermath of a redundancy, especially if it has been unexpected, you may not always be thinking logically. Redundancy within the legal sector is much more prevalent than previously, and there is therefore more understanding of the implications for Solicitors, as well as more sources of support and advice.

1. Reduce and manage expenditure and spending: look especially at large items such as running car(s) and subscriptions. The sooner you do this, the earlier you will feel more in control of your situation.
2. Are there ways to increase income, even by selling unwanted items through sites such as E-Bay? Many professional people have acquired new gadgets over the years and often don’t use them.
3. Managing your household’s money: think about your credit card providers, mortgage lender or landlord and whether there is any room for negotiation on these items? Have you used websites that compare prices for significant items such as gas and electricity? Think about having a weekly or monthly budget to make what money you have last longer.

Despite best intentions, some who have faced redundancy go on to experience debt. If this affects you, there are many sources of free advice, such as the Citizens Advice Bureau (CAB) and the National Debt Line. You should be honest, not only with yourself and your family, but also with your bank and creditors. If considering seeking assistance form companies who claim they can negotiate with your creditors, be very careful to read any agreements they ask you to sign and be aware that often their service may be restricted to specific areas of debt.

Another source of advice is LawCare, a charity that offers help and support to Solicitors on various issues including the effects of redundancy on health, career and finances.

Sensible hints to assist with you in managing debt are:

• Think about putting your debts in priority order, taking into account the consequences of falling behind with paying them. These consequences will vary in seriousness.
• Don’t increase your debt by taking out more credit.
• Set and stick to a realistic monthly budget, and use a debt adviser to assist you work this out.
• Links to the websites which might be helpful include: National Debtline (Scottish edition)  and Citizens' Advice Scotland

Locum solicitors

Whether you have a locum placement available to fill or have spare capacity and could take up a position as a locum under a short term contract, details of the options are available through the Society's recruitment site  LawScotJobs  Further details are given on our Find a Locum page.

Networking groups for sole practitioners

Monthly meetings are held in Edinburgh and Glasgow. For details please check the dedicated Sole Practitioners' pages.

LawCare

LawCare recently completed a nationwide survey of stress in the legal profession. Over 1,000 legal professionals from across the UK took part and results indicate that over three quarters feel more stressed than they did five years ago.

LawCare is the specialist charity which helps lawyers and their families with problems such as stress, depression and alcohol misuse in the legal profession. Trained staff and volunteers are available 365 days a year on the confidential free helpline 0800 279 6888. The LawCare website offers practical assistance and information packs on a range of topics including redundancy and alternative careers.