Cash clinic: Redundancy looms - what should I do to protect my family?

Q The company I work for has been through a very rocky patch over the last six months. A significant amount of redundancies have already been made and I think it's only a matter of weeks before I am made redundant.

I have a young family and I am becoming very concerned about how I can provide for them going forward. Can you advise me on how best to prepare for redundancy? If I am made redundant, how do I negotiate the best possible redundancy package? And will I be able to claim on my insurance for redundancy? Any advice you can offer would be much appreciated.

JD, Fife

A If you are worried about your job security you are wise to start thinking about what you can do to prepare for the situation. However, you must remain positive and should not let fear of losing your job take over. You should start updating your CV now as this can often take longer than you think. Consider signing up with a recruitment agency or applying for new jobs. Even if your current job ends up being safe, you could end up in a better job.

If your employer has a trade union it will be worth joining. Unions can provide advice and support in redundancy situations and will ensure that your employer's redundancy selection processes are fair, transparent and non-discriminatory.

You should find out if your employer has a policy whereby it pays an enhanced redundancy sum (more than your statutory minimum redundancy entitlement). Even if it does not have a written policy you should try to find out what other colleagues have received in the previous redundancy rounds. If they have received an enhanced sum you may be legally entitled to receive the same.

You should check the terms of your contract of employment to see whether you are entitled to receive a payment in lieu of any benefits which you enjoy (i.e. private health care or employer pension contributions) in addition to your basic salary if you are not asked to work during your notice period, following any notice of redundancy.

Remember you will have very little to lose by trying to negotiate a better redundancy package. Your employer wants to avoid any subsequent legal action so may be more flexible than you expect. It helps if you can give specific reasons why you deserve more and you may be able to negotiate financial assistance for re-training or to engage with a career development consultant.

Following redundancy, you will be able to claim on your insurance if you have an adequate policy in place. If you have an income protection policy or mortgage protection policy, this may pay a replacement income or cover mortgage payments for a fixed period after you are made redundant.

However, it is important that you check the terms of your policies as they may contain restrictions or exclusions. For instance, there may be a delay before payments start and you may not be able to claim if you lose your job within a set period after taking out the policy. Importantly, the policy may not pay out in the case of voluntary redundancy, so check your terms before you think about accepting such an offer.

• Jacqueline McCluskey is an employment partner at HBJ Gateley Wareing.

If you have a question you need answered, write to Jeff Salway, The Scotsman, 108 Holyrood Road, Edinburgh EH8 8AS or e-mail: [email protected].

This above is for general purposes only and is not tailored for individual use. It does not constitute legal, financial or investment advice on any particular matter and must not be treated as a substitute for specific advice. No action should be taken in reliance of the information given. The Scotsman Publications Ltd and HBJ Gateley Wareing accept no liability on the basis of this article.