The spectre of redundancy has begun to haunt the maritime profession for the first time in many years.

Although redundancy may often come as a shock, many members find another job quite quickly. Redundancy need not be the end of your seafaring or marine career – the national and international shortage of skilled and experienced officers means vacancies continue to arise in many sectors.

But because the industry has been buoyant for the past decade or so, many Nautilus members may not have experience of losing their job. So we've put together this basic guide to redundancy.

Though, it is important to remember that the laws are complex – especially for seafarers employed on non-UK contracts – and individual circumstances may vary dramatically. It is always important to seek advice and assistance from the Union. Not yet a member? Become one now!

Q: I think my company may be on the verge of announcing job losses. What should I do?
A: Firstly, tell Nautilus International. If we have an agreement with the company, officials can get involved at an early stage in consultations and negotiations. Often, the Union is able to reduce the number of planned job losses and to ensure that any redundancies are on a voluntary basis.

If the company is of a certain size, and has a recognition agreement with the Union, it is required to discuss reasons for the redundancies, the numbers and descriptions of those affected, the proposed method of selecting those to be made redundant – such as ‘last in, first out’ - and how any redundancy payments better than the legal minimum will be worked out.

Q: What should I do if I believe that I have been unfairly selected for redundancy?
A: It is important to note that UK employers are required to follow proper procedures – including consultation and notice periods - when making people redundant. The UK laws on redundancy changed with effect from 6 April 2009, but the rules require employers to discuss your redundancy and to consult with you about alternative jobs. You have the right to be accompanied by a colleague or a trade union official. If this does not happen, then your dismissal may be legally unfair and you may be entitled to compensation. Again, it is important to always seek advice before taking a complaint to an employment tribunal – contact the Union!

Q: What factors do employers consider when deciding who will be made redundant?
A: UK companies are not allowed to select on the basis of sex, race, disability, age (unless objectively justified), sexual orientation, transgender status, religion or belief, pregnancy or trade union membership. They can make selection on the following grounds:

  • skill and capability (sometimes this can lead to the particularly stressful process of people having to re-apply for their jobs)
  • attendance record
  • conduct record
  • any agreed existing procedure
  • type of work needed to be done by those remaining

Q: My company says it will continue to employ me, but not in my existing role. Is that legally acceptable?
A: If your employer offers you an alternative job, you will need to think carefully. If you turn it down you may no longer be legally redundant, and would be in the same position as if you had just resigned. If your employer says you have left a suitable job and is refusing you redundancy pay, you will need to make a claim in an employment tribunal and show them why the job was unsuitable. If the tribunal finds that you have refused a suitable offer of alternative employment you will lose your right to a redundancy payment.

Q: I have been made redundant. What are my rights to redundancy pay?
A: UK law sets out minimum redundancy pay, but not everybody is entitled to it. To be entitled to the legal minimum you must have:

  • worked continuously for at least two years for your employer and
  • be an employee. (The difference between an employee and a worker is a complex legal point. Most people are employees, but you may be a worker if you do not have a contract of employment and have a less formal relationship with your employer – many agency workers are not employees, for example.)

Q: What about notice?
A: If you are made redundant you are entitled to a minimum period of notice.
For every year you have worked for your employer, you should get one week’s notice, up to a maximum of 12 weeks. If your employer makes, or lets, you leave before this period you should still be paid for the full notice period. Your contract of employment may be more generous.

Q: How much will I get?
A: The UK legal minimum you should get depends on:

  • how long you have worked continuously for your employer
  • redundancy pay (maternity, paternity and parental leave count as part of continuous employment)
  • how old you are
  • how much you are paid

Some employers will offer better terms and some will include these in your contract of employment. If your company has an agreement with the Union, improved terms may be in place or negotiated.

Your employer may also offer a ‘severance’ payment, which is a lump sum offered as compensation for ending your employment. This must be above the legal minimum if your job is being made redundant.

When you leave, make sure your employer gives you:

  • your P45 form
  • written details of your redundancy package, and
  • a good reference

Q: What should I do with my redundancy pay?
A: Redundancy payments are often quite modest and will only help tide you over until you get another job. But with long service or a redundancy payment greater than the legal minimum, you may get a decent amount. A redundancy cheque may be one of the biggest amounts of money you receive in one go. It can be tempting to spend it all!

But unless you know you have another job to go to, think carefully. A priority should be paying off any debt that you have. Servicing debt is expensive, and you can quickly get into real difficulties if you find that you cannot keep up payments while you are unemployed. If you have any left over then you may need it simply to help meet everyday living costs.

If you have got a more substantial sum, it might be good to use it towards studying for a higher certificate or qualifications such as dynamic positioning or dangerous cargo endorsements that will improve your chances of finding another job.

Q: What should I do about my pension arrangements?
A: Members who are in pension schemes (whether defined benefit or defined contribution) will have to carefully consider the options open to them.

Those who are in company pension schemes should have their options explained to them by their employer when they cease to be employed. For some, early retirement might be an option - but this should only be considered after receiving independent advice.

For those still contributing to the MNOPF it may be possible to continue making voluntary contributions of, say, £5 per month which will maintain their contributor member status under the MNOPF rules. This status is important as it may protect certain rights relating, for example, to ill health pensions and death benefits.

For members who are forced to come out of a company scheme, MNOPP or the MNOPF, it may be appropriate to join The Maritime Stakeholder Plan which does not require employer contributions. Independent financial advice on pension and other matters can be obtained from:

Russell Warman
Pensions & Wealth Planning Limited
Pensions Lakeside Business Park
Swan Lane
Sandhurst
Berkshire
GU47 9DN

Tel:  +44 (0)1252 861380
Fax:  +44 (0)1252 861381
Email: russell.warman@penwp.co.uk

Q: What about state benefits?
A: If you are made redundant, you are likely to be eligible for Jobseeker’s Allowance. Other benefits such as Employment and Support Allowance or Income Support may be available in limited circumstances. From April 2009 income support for mortgage interest (ISMI) benefit will be paid on the first £175,000 of your mortgage and will begin after 13 weeks of unemployment for new claimants. However, the benefit will only cover interest repayments; it will not cover any repayments of capital.

Q: Where can I get further information?
A: If you have any further queries, use the relevant contacts below:

  • your Nautilus official – contact us
  • the TUC’s Know Your Rights line - 0870 600 4 882. Calls are charged at the national rate
  • Citizens Advice service website www.citizensadvice.org.uk
  • HMRC (formerly the Inland Revenue) - 0800 597 5976 or visit www.hmrc.gov.uk to find your local office
  • Jobcentre Plus benefits claim line - 0800 055 6688 or visit www.jobcentreplus.gov.uk