Lost my job - what next?
This article provides a few suggestions on practical steps you can take if you've lost your job.
1. Verify the reason for dismissal
There are only six potentially fair reasons for dismissal:
- lack of qualifications;
- legal bar prevents continuing employment;
- "some other substantial reason" justifies dismissal (e.g., acting inappropriately at work).
In all circumstances, your employer must act reasonably in treating the reason as a sufficient ground for dismissal. If your employer did not have a fair reason or acted unreasonably, you may have a claim for unfair dismissal and/or wrongful dismissal.
2. Review the dismissal procedure
Whilst an employer may have a fair reason for dismissal, the dismissal procedure must also be fair. Examples of procedural unfairness include unfair selection for redundancy and failing to carry out a proper investigation before dismissal for gross misconduct.
As above, if your employer used an unfair dismissal procedure, you might have a claim.
3. Ensure your employer consulted and fairly selected employees for redundancy
By statute, employers have a number of obligations in relation to redundancy. They must fairly select, warn and consult affected employees (or their representatives). They should also explain the business rationale for redundancy and take reasonable steps to avoid or minimise its impact by redeployment or retraining.
If your employer failed to do this, you may be entitled to compensation and/or reinstatement.
4. Check you received the correct payout
Upon dismissal, your employer should give you a letter explaining any final payments made to you, including: statutory and/or contractual redundancy payments; payment in lieu of notice; holiday pay; and bonuses. It should also state how you can appeal your dismissal.
To work out whether or not you qualify for redundancy pay, you should first look at your employment contract. If it doesn't mention a payment (or you don't have a written contract), you may still be legally entitled to statutory redundancy pay.
Generally, to qualify for statutory redundancy pay:
- you must have worked as an employee;
- continuously for the same employer for two years over the age of 18;
- your employer must dismiss you (actually, constructively, or on expiration of a fixed-term contract);
- the reason for dismissal must fall within the statutory definition of redundancy;
- you must not unreasonably refuse an offer of suitable alterative employment;
- you must claim redundancy within an established time limit; and
- your job must not fall within a narrow class of employees ineligible for redundancy pay (e.g., you work in the armed forces).
The amount of statutory redundancy pay you receive depends on how long you have been employed, your age, and your weekly pay before tax:
- for each year of continuous employment between the ages of 16 and 21 you will get half a week's pay;
- for each year of continuous employment between the ages of 22 and 40 you will get one week's pay;
- for each year of continuous employment between the ages of 41 and 65 you will receive one and a half weeks' pay.
Note, however, that there is an upper limit of £430 (gross) on the amount of weekly pay you can claim, and a maximum overall statutory redundancy payment limit of £12,900.
In addition, any period of continuous employment over 20 years will be disregarded and for every month you are over the age of 64 you will lose 1/12 of your entitlement, and the entitlement disappears at age 65.
On top of redundancy pay, you should also receive notice or payment in lieu of notice (see below), accrued holiday pay, and any bonuses you're entitled to under your contract of employment.
5. Make certain you got the right amount of notice or payment in lieu of notice
Your employee handbook or employment contract should outline the amount of notice you were entitled to, which may be more (but not less) than the period you are guaranteed under statute.
- if employed continuously for one month to two years, you should receive a minimum of one weeks' notice (so your employer does not need to give you any notice if you have been working for less than one month);
- if employed continuously for over two years, you should receive one weeks' minimum notice for each year worked (up to a maximum minimum, as it were, of 12 weeks).
Your employer may offer to pay you instead of providing you with your contractual or statutory notice, which is called payment in lieu of notice (often abbreviated to 'PILON'). This allows your employer to end your employment contract without providing you with any notice. However, they must pay you for all the wages you would have received had you worked your notice period.
In some circumstances, you have no right to notice. This may be the case where you are dismissed summarily for gross misconduct.
Check your employment contract to see how much notice you're entitled to. If you do not get this notice, or the statutory minimum, you can probably claim wrongful dismissal.
6. Invest wisely
The payout you receive upon dismissal may be quite considerable, particularly if you worked for the same employer for a long period of time. Before you go out and splurge it all, remember it may be a while before you work again so it's probably better to invest the money and save it for a rainy day.
7. Check your benefits entitlement
If you're unable to find another job straightaway, but you're actively looking for work, you may qualify for Job Seeker's Allowance and Income Support. If you have a mortgage, you may also be eligible for Support for Mortgage Interest, which is designed to help those on Income Support, Pension Credits and income-based Job Seeker's Allowance with their mortgage payments. Visit your local Jobcentre Plus as a matter of priority and check out DirectGov for more information.
8. Analyse your budget
Carefully analyse your budget if you lose your job. Go through your spending during the final three months of your employment. Divide purchases into essential and non-essential items. Then, come up with a plan to eliminate non-essential spending until you find a new job. Factor in the benefits you will receive and identify any shortfall between income and essential outgoings. Try to avoid getting into debt to meet any shortfall; use savings or ask family for help instead.
9. Update your CV, but don't procrastinate
The biggest mistake people make when they're unemployed is to spend hours, days even, procrastinating over their CV and cover letters. Don't fall into this trap and stay disciplined. The best way to find a job is to network and get out there. Visit your local library or Jobcentre Plus for inspiration and to learn the best strategies to land a job.
10. Apply for relevant jobs
Apply for as many relevant jobs as you can. However, don't waste your time applying for jobs you're ill-suited or unqualified for. Instead, you should focus on applying for the jobs you're at least in with a shout of getting.