A redundancy package is not a lottery win and people shouldget advice on how to use it, writes Laura Slattery.

No matter how much people moan about the daily stresses or repetitive nature of their job, it can't be much fun to turn up for work one morning only to find that the job isn't there any more.

Being made redundant unexpectedly is a traumatic event and, like sudden separation from a partner, it can bring recriminations, self-doubt and, above all, a panicky feeling of "what do I do now?" to the surface.

Unless they are lucky enough to line up a new job straight away, most employees who are made redundant will need money to pay the rent or the mortgage while they work out their future.

Some younger employees may be able to fall back into parental dependence and others may have the safety net of a partner's income, but many will count on the lump sum they receive on redundancy.

Five days ago, the statutory sum that employers must pay staff if they are being made redundant increased, following years of campaigning from unions and organisations for the unemployed, as provisions under the Redundancy Payments Act 2003 came into effect.

Workers who are made redundant will now receive two weeks' pay per year of service, up from half a week's pay per year of service for employees under 41 and from one week's pay per year of service for those over that age.

There is a ceiling of €507.90 a week on the statutory amount employers must pay, so the maximum that employees are guaranteed is just over €1,000 a year for each year they worked for the company. As before, one further week's pay is also included in the overall payment.

"It's a major shock to people when they are made redundant and this payment is a major help in terms of giving them some capital," says Mr Eric Conroy, general secretary of the Irish National Organisation for the Unemployed (INOU).

"Certainly, it's a very welcome increase from the very low level it has been up to now."

However, the legislation will not be backdated, disappointing thousands of workers who have lost their jobs over the last year due to the closure or insolvency of the company for which they worked.

Some 24,000 people were made redundant in Ireland last year and the rate of redundancies increased again in the early months of 2003. The figures in the first quarter of this year were up 9 per cent on the same period last year.

The tax-free statutory payment is the minimum workers can expect if they are let go.

Where short-notice compulsory redundancies are concerned, a union may negotiate to get a better package from the employer, while companies that are restructuring their workforce rather than closing down completely usually begin by looking for voluntary redundancies.

Sometimes in these situations, it can be that "you are given the kind of amount you can't refuse", says Mr Conroy.

However, the size of the employer contribution to any package depends greatly on both the circumstances and the sector. When manufacturing plants close, for instance, workers "wouldn't be getting a great deal by any means", Mr Conroy says - hence the campaign to "raise the bar" on statutory payments.

As redundancies are announced, people tend to focus predominantly on the size of the package, according to Ms Lillian Bissett-Farrell, managing director of Right Transition, which is part of global career transition and organisational consulting firm Right Management Consultants.

"A good package undoubtedly reduces the stress level associated with job loss," Ms Bissett-Farrell concedes. However, this focus changes as people start to review their transferable skills and marketability.

"People should remember that the key purpose of a redundancy package is to cushion them against short-term loss of income. A redundancy package should not be treated as a nest egg for the future, even though part of it may end up as such," Ms Bissett-Farrell notes. It should be used as an opportunity to make the right career move, she adds.

Even if there is a large package on the table, it is important "not to blow it, like winning the lottery", says Mr Conroy. "People who are made redundant should consider getting financial advice," he adds.

Laid-off employees nearing retirement could consider using the money to boost their pension fund, but other options include using it to finance further education and training, using it to fund setting up their own business, or just using it to tide themselves over while they are waiting for a suitable job to come along.

Redundancy can, ironically, lead to new career opportunities. "In a significant number of cases it can prove to be the catalyst that enables the individual to take the action that they have been putting off," says Ms Bissett-Farrell.

But results of a recent survey of workers in Ireland and 16 other countries by Right Management Consultants indicate that, while workers in different countries have varying levels of confidence about the security of their current job, people are universally concerned about how to replace their level of remuneration if that job was to be lost.

In Ireland, eight out of 10 people surveyed in the Career Confidence Index said they thought it would be difficult to find a similar job at the same pay if they were laid off.

So how long should someone be prepared to search for the right job?

"Assuming the job search is properly structured and the next move is suitable, Right Transition's experience shows that the average time taken at executive level is four months and for administrative and operative levels it is less," says Ms Bissett-Farrell.

But as the jobs market is currently more subdued, it may be pragmatic to take an interim career move, she believes.

People do get financially stretched, confirms Ms Jeannette Naughton, a consultant at BrightWater Selection recruitment consultancy, and there are temporary jobs out there for those who want them.

"There's a certain amount of 'I don't want to do temp', but working on a temporary basis can be an excellent way of getting into a company. So often, temporary jobs become permanent."

People who are made redundant can register with every recruitment agency in Dublin and search online and in newspapers, but they should also draw on any personal contacts, Ms Naughton says.

"Don't be ashamed. Let everyone know you are looking for a job. Your own network is very important, especially in the Dublin market, because so much happens behind closed doors."

There used to be a slight stigma attached to redundancy, Ms Naughton notes. "It was almost a case of 'Oh my God, they've been made redundant, what's wrong with them?'."

She believes that people given the choice of voluntary redundancy still ask: "I've been with this company for so long, who's going to want to employ me?"

Ms Naughton has interviewed one client who worked with one company for 20 years and was "absolutely stunned" when voluntary redundancy was offered.

"There was a huge package on the table, about €100,000, but he was scared to take it in case he couldn't get another job."

Eventually he did take it, discovered that he had IT skills that were in demand and found a job within three weeks through one of his old contacts.

"That was a really nice story, but the market is tough now. It does take six months sometimes," she says.

"The important thing is not to panic."