Redundancy - Getting it Right

by Kate Russell

Time off when at risk of redundancy

An employee who is given notice of dismissal because of redundancy is entitled to reasonable time off with pay during working hours to look for another job, or to make arrangements for training for future employment. You must allow the time off before the employee’s notice period expires.

Employees are entitled to time off in this way if, on a specified date, they have had two years’ continuous employment.

The date referred to is either the date when the employee’s notice expires or the date when the statutory minimum period of notice due under the legislation expires, whichever is the later.

The employee is allowed ‘reasonable’ time off. The legislation does not specify what is reasonable. The amount of time off will vary with the differing circumstances of employers and employees. The courts have indicated that this might be two or three days per week, but it depends on the circumstances. Some employees may need only to attend one interview or make one visit. Others may have to make a number of visits, which may involve travelling some distance.

Payment for time off

Employees should be paid the appropriate hourly rate for the period of absence from work. This is arrived at by dividing the amount of a week’s pay by the number of the employee’s normal working hours in the week. A week’s pay is calculated by reference to a date known as ‘the calculation date’. In calculating pay for time off to look for work or arrange training, this date is the date on which you gave him notice.

You don’t have to pay more than once for the same period. Any payment already made under an employee’s contract of employment for a period of time off to look for work will be offset against your liability as an employer under the provisions.

The entitlement to paid time off is limited to 40 per cent of a week’s pay for the whole notice period.