1. Introduction
1.1 Who should read this practice note?
Solicitors who are, or may be, facing redundancy.
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1.2 What is the issue?
The prospect of redundancy can be unsettling, this practice note contains general advice for solicitors facing redundancy and also signposts where to find comprehensive information and further assistance.
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2. Circumstances for redundancy
Redundancy usually occurs when:
- the job you were hired to do no longer exists
- your employer needs to cut costs or reduce staff numbers
- the employer has ceased or intends to cease operations either in a particular location or a particular legal field
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3. Employer obligations
Your employer has certain legal responsibilities surrounding redundancy.
3.1 Fair selection
Your employer must select those for redundancy in a fair, objective and non-discriminatory manner. Workers are protected from being chosen unfairly for redundancy by the Employment Rights Act 1996.
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3.2 Consulting with you
Employers must both:
- notify individuals concerned of the possibility of redundancy
- consult with them before reaching a definite decision regarding dismissal
The consultation should include all of the following factors:
- why the firm/organisation has decided that it is necessary to make redundancies
- how the firm/organisation identified the selection pools
- the selection criteria and how it is applied
- why your position has been provisionally selected for redundancy
- the terms on which any redundancy would take place
- possibilities for alternative employment within the firm/organisation
- any ideas you may have for avoiding redundancy or reasons why you think the firm/organisation should not select you for redundancy
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3.3 Redundancy pay
Statutory redundancy pay is only awarded where you have had at least two years continuous service with your employer, including time spent under a training contract. See section 4 for more information.
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3.4 Notice periods
The length of your notice period will appear in your contract of employment and must not be less than the minimum periods. If your contractual notice is less than the statutory minimum, the statutory minimum will prevail. The minimum periods are:
- at least one week's notice if you have been employed for between one month and two years
- one week's notice for each year if employed for between two and twelve years
- twelve weeks' notice if employed for twelve years or more
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3.5 Considering alternatives to redundancy
Employers must take reasonable steps to avoid redundancies. This includes taking steps to redeploy affected employees.
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3.6 Maternity
Employees on maternity leave have special protection under regulation 10 of the Maternity and Parental Leave Regulations 1999 relating to suitable alternative employment. This includes an express statutory right to any suitable alternative vacancy that exists.
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3.7 Collective redundancy
A collective redundancy situation arises when an employer proposes to dismiss twenty or more employees in one establishment over a period of ninety days. Collective redundancy triggers specific requirements for:
- notification
- information provision
- consultation.
You should take legal advice if you believe that your redundancy falls into this category. Find out more on the BERR website .
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4. Issues for trainee solicitors
Trainee solicitors may have their training contract terminated by redundancy because either:
- the firm/organisation has ceased doing business
- the requirements for employees to do trainee work have ceased or diminished
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4.1 Your rights
You should check the terms of your employment contract to ensure that the firm/organisation is not in breach of any clauses in making you redundant. These terms are separate from your training contract. You should consult an employment law solicitor if you feel your employment contract has been breached in any way.
Where a genuine situation of redundancy has been identified, practices must make an application to the SRA for termination of the training contract.
Trainees do not generally have an automatic right to a redundancy payment as the statutory scheme requires two years of continuous employment with an employer. You may however have this qualifying service period if you worked with the firm/organisation before undertaking your training contract, for example as a paralegal.
To discuss training contract issues, contact the SRA .
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4.2 Notifying the SRA
You should notify the SRA of the status of your training contract via a TC3 form. Your firm/organisation can obtain these from the SRA, to be signed by both you and the firm/organisation you are leaving. This will enable you to suspend your training contract and bank the time you have worked.
It is your responsibility to find another firm/organisation who will enable you to complete your training with them. The TC3 form should be signed by the new firm/organisation when you resume your training contract.
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5. Your redundancy package
There is no basic right to a redundancy package beyond the statutory minimum payment for eligible employees. Employers do however have discretion to make ex gratia payments to all employees and you should check your firm/organisation's redundancy policy or contractual redundancy terms. You should consider negotiating a redundancy package but your approach should depend on both:
- your perception of the firm/organisation's position
- the reasons for the redundancy
For example, options will be limited if your employer is insolvent.
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5.1 Statutory pay
Statutory redundancy pay is awarded where you have had at least two years' continuous service with your employer. It is based upon your age and length of service.
The Employment Equality (Age) Regulations 2006 which came into force on 1 October 2006 removed the previous upper and lower age limits of 65 and 18 for statutory redundancy payments.
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5.2 Calculating the statutory minimum
This produces the number of weeks' pay that you are entitled to, this is then multiplied by your gross weekly pay, subject to an annually reviewed cap.
You can calculate your statutory redundancy amount using the BERR online calculator .
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5.3 Negotiating a package
You should discuss the terms of your redundancy with your firm/organisation if you feel that there is room for negotiation. This may form part of the redundancy consultation procedure, but you may also request the meeting directly. This will give you the opportunity to consider your situation and the proposed terms. A generous package may be available beyond statutory pay.
The amount of redundancy payment depends on both:
- your length of continuous employment with the firm/organisation
- your years of service relative to your age band
You should separate any negotiated compensation from other monies due, for example for expenses claims or payment in lieu of notice or holiday.
If you receive benefits such as a car or assistance with child care provision, you may consider negotiating the continuation of these for a limited period or until you have found another position.
You could also ask your employer to pay for the renewal of your practising certificate. A current practising certificate may help you with finding locum work until a permanent position is obtained.
You should ask your employer to provide full references which explain why you were made redundant and confirming that the decision was not a reflection of your work but changes in client demands, or the economy for example. It is important to have a letter from your employer confirming the position, otherwise you could lose your entitlement to state benefits.
You may consider continuing to receive the firm/organisation's updating materials.
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5.4 Tax
You do not have to pay tax on statutory redundancy payment. However, any additional redundancy payments you receive from your employer may be taxable.
See the table below for examples:
Payment | Is tax payable? | Is national insurance payable? |
Redundancy payment | Only above £30,000 | No |
Unpaid salary | Yes | Yes |
Bonus payment | Yes | Yes |
Occupational pension | Yes | No |
Anything else you receive that is not money is converted into a cash value for tax and national insurance contribution purposes. If these items were given to compensate for your redundancy, the cash value counts towards the £30,000 tax free limit.
Payment in lieu of notice is usually subject to tax and national insurance contributions as normal. However, you may be able to get this paid tax free if there is no clause entitling your employer to make this payment in your contract of employment. You should take specialist legal advice on this point.
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5.5 State benefits
Statutory redundancy payments have no effect on your entitlement to contribution-based Jobseekers Allowance. If you have lost your job through redundancy you normally qualify for Jobseekers Allowance. You cannot claim Income Support or Income based Jobseekers Allowance if your personal resources, including redundancy pay or unfair dismissal compensation, exceed £8,000. You may however, qualify for contribution-based allowance. Contribution-based Jobseekers Allowance depends on the status of the worker's national insurance contributions. You will need to have paid national insurance contributions for one of the last two complete benefit years before the tax year in which the allowance is claimed, and have contributions or credits for both benefit years. Jobseekers Allowance is paid for six months, maximum.
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6. Personal considerations
6.1 Working notice periods
You should consider with your employer whether you are to work the period of notice. If you are, remember that your employer should allow you reasonable time off to look for an alternative position. Legislation does not specify what is reasonable as this would vary depending on circumstances.
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6.2 CPD requirements
When you are made redundant you may suspend your CPD requirement. You do not need to make an application to the Solicitors Regulation Authority. You should make a note in your personal training record of the date and reason for any suspension. You then can resume once you are back in legal employment. You must ensure that you record this information correctly because the Solicitors Regulation Authority is able to call for your training record at any time. If you choose not to suspend, you will be expected to meet your CPD requirements in full.
You will be required to declare that you have satisfied your CPD requirement when you next apply for your practising certificate, so you must make a decision whether or not to suspend and record details of the suspension.
Further information can be obtained from the Solicitors Regulation Authority. See 8.12 SRA Contact Centre
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6.3 Practising certificate requirements
If you hold a practising certificate at the time of being made redundant your certificate will be up for renewal on 31 October. You then have a choice to renew the certificate or to allow it to lapse. If you wish to renew your certificate, you must complete a RF3 application form and submit the relevant fees and application to the Solicitors Regulation Authority. If you do not apply to renew your certificate by March/ April you will be sent a KR1 application form to keep your name on the Roll. The fee is currently £20 per year.
If you have not held a practising certificate for more than twelve months, you will become subject to section 12C of the Solicitor Act 1974. This means that if you wish to apply for a practising certificate, you will be required to notify the Solicitors Regulation Authority six weeks in advance of your intention. You must complete form RFs12, and return it with the appropriate fee to the Solicitors Regulation Authority. There are no special conditions that apply, nor are there any compulsory courses, other than the normal continuing professional development requirements (CPD).
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6.4 Finances
You must notify your creditors, in particular Banks and Building Societies, if you feel that you are unable to make normal payments. If possible, you should arrange a meeting so that you are able to speak face to face.
If redundancy leaves you in a difficult financial situation the Solicitors Benevolent Association (SBA) may be able to help, particularly if you have dependents or unusual financial problems.
You may also benefit from seeking independent legal advice. The Solicitors' Assistance Scheme (SAS) offers confidential legal advice to fellow solicitors with the initial consultation being free.
You may consider the availability of all state benefits.
You may consider the possibility of being entitled to a tax rebate.
You should avoid hasty decisions about pension contributions.
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6.5 Keeping in touch
It is important to keep in touch with the profession even though you may be out of the work place. You may consider:
- maintaining contact with friends in practice
- developing or maintaining contacts with your local Law Society
- attending local and special interest groups' meetings
- signing up to relevant mailing lists to keep up to date with events, and
- notifying the Law Society Gazette of your current address.
You may keep your name on the Roll of Solicitors even if you do not keep up your practising certificate. The cost of this is £20 per year.
If your name is removed from the Roll, you must refer to yourself as a former solicitor, not a solicitor. To reinstate your name to the Roll you must complete a KR4 form and pay a £20 fee.
If you remove your name and then find employment that requires you to both be on the Roll and hold a practising certificate, it will take approximately 21 to 28 days to have your name reinstated. You may not apply for a practising certificate until your name is included on the Roll.
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7. Moving on
Redundancy is no reflection of your legal ability. You shouldn't take it personally; the job was deemed redundant and not you. You will likely experience a range of emotions, and it helps to talk this through to deal with your response. Your employer may provide counselling services. For alternative assistance contact LawCare who offer a confidential free advisory and support service for lawyers who are suffering from work-related difficulties.
For information on job seeking, read the Society's job seeking practice note.
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8. More information
8.1 Employment rights, pay, fair selection and consultation
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8.2 Practice Advice Service
The Law Society provides support to solicitors on a wide range of areas of legal practice. The service is staffed by solicitors and can be contacted on 0870 606 2522 from 09.00 to 17.00 on weekdays.
Visit the Practice Advice Service website.
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8.3 The Solicitors Assistance Scheme
Visit the Solicitors Assistance Scheme website.
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8.4 Junior Lawyers Division of the Law Society
Support, advice and networking opportunities for students, trainees and newly qualified solicitors.
Visit the Junior Lawyers Division
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8.5 Junior Lawyers Division confidential helpline
Free phone: 08000 856 131 Lines are open from 09:00 to 21:00, Monday to Friday.
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8.6 LawCare
Telephone: 0800 279 6888 Lines are open 09:00 - 19:30, Monday to Friday, and 10:00 - 16:00 at weekends.
Visit the Law Care website.
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8.8 Law Society Publishing books
For practical coverage of employment law and employment tribunals, see our latest books:
Visit the Law Society Bookshop for more employment related titles.
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8.9 Law Society Pastoral Care Helpline
Referral service for solicitors who need help with personal, financial, professional or employment problems.
Telephone 020 7320 5795
Lines are open from 09:00 - 17:00, Monday to Friday.
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8.10 Solicitors Assistance Scheme
Provides free initial legal advice, including on employment issues, to solicitors, their families and their staff.
Visit the Solicitors Assistance Scheme website
Telephone: 020 7117 8811
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8.11 Solicitors Benevolent Association
Charity providing financial assistance in times of hardship for solicitors and their dependants.
Visit the Solicitors Benevolent Association website.
Telephone 020 8675 6440
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8.12 Solicitors Regulation Authority Contact Centre
Assists solicitors with enquiries relating to practising certificates, continuing professional development (CPD) and other general enquiries.
Vist the Solicitors Regulation Authority website
Telephone 0870 606 2555
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8.13 Status of this advice
Practice notes are issued by the Law Society for the use and benefit of its members. They represent the Law Society's view of good practice in a particular area. They are not intended to be the only standard of good practice that solicitors can follow. You are not required to follow them, but doing so will make it easier to account to oversight bodies for your actions.
Practice notes are not legal advice, nor do they necessarily provide a defence to complaints of misconduct or of inadequate professional service. While care has been taken to ensure that they are accurate, up to date and useful, the Law Society will not accept any legal liability in relation to them.
For queries or comments on this practice note contact the Law Society's Practice Advice Service.
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8.14 Terminology in this advice
Must - a specific requirement in the Solicitor's Code of Conduct or legislation. You must comply, unless there are specific exemptions or defences provided for in the code of conduct or relevant legislation.
Should - good practice for most situations in the Law Society's view. If you do not follow this, you must be able to justify to oversight bodies why this is appropriate, either for your practice, or in the particular retainer.
May - a non-exhaustive list of options for meeting your obligations. Which option you choose is determined by the risk profile of the individual practice, client or retainer. You must be able to justify why this was an appropriate option to oversight bodies.
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