While Sir Alan Sugar may revel in shouting 'You're fired' at hapless contestants on reality show The Apprentice, the truth is that hearing those words in the real world can come as a total and unexpected shock.

Redundancy is one of the most stressful events anybody can suffer but, sadly, it looks like thousands of people may hear Sir Alan's catchphrase over the next few months. The well-publicised credit crunch has prompted predictions that up to 10,000 jobs could be lost in the City alone this year, which will certainly have repercussions for the wider economy.

Redundancy Help, an independent website offering advice on all aspects of redundancy, recognises that people who suffer this fate feel a range of emotions, from shock to denial to anger. It offers a direct link to professional counsellors, who are all members of the British Association of Counsellors and Psychotherapists.

The Citizens' Advice Bureau also produces a special guide to assist people who have been made redundant. It recommends first establishing that the redundancy is legally fair.

An employee can only be made redundant if the business goes bust, closes down, moves to another area or changes the way it does things. "If you think none of these circumstances apply, then it may be that the dismissal is unfair," says spokesman Catherine Torazzo. "If you think this has happened, you could get compensation and you should get advice."

H2g2, a website created by the BBC which is written by its visitors, advises that, on learning about redundancy, the victim should not react emotionally while on the premises. "If you want to howl, scream, swear, call the company and management names, save it till you're at home," its members (speaking from experience) recommend. "If necessary, leave the premises immediately, and don't feel the need to give an explanation either. What are they going to do, fire you again?"

"If you want to howl, scream, swear, call the company and management names, save it till you're at home."

Similarly, do not be tempted to do anything in retaliation in case you later decide to take the company to an industrial tribunal. Reacting aggressively or unreasonably merely gives the company ammunition to portray you as a disgruntled employee at a tribunal. Acting with dignity and professionalism at the shock news may encourage people within the company to use their contacts to help your search for a new job. Similarly, companies have been known to re-hire staff previously made redundant when the situation improves.

The Department of Trade & Industry recommends that the minimum period of notice for an employee being made redundant is one week if they have worked for the company for more than one month but less than two years; two weeks if they have worked for two years; and one additional week for each further full year's employment up to a maximum of twelve weeks' notice.

Redundancy pay, however, is only due to those employees with more than two years' service, and will depend on length of service on age. There is a legal limit on how much can be paid, but, on February 1, statutory redundancy pay rose to £330 per week, which is still taxable. Ex-gratia termination payments, which can include cash or company cars, are tax free up to a value of £30,000.

The financial situation is however slightly more complex if those employees being made redundant are part of a share ownership scheme. Michelle Chance, senior associate at City law firm Fox, says that much will depend on the scheme's rules. "Each scheme is different," she says. "Some companies may direct the remuneration committee to allow the options to vest immediately." Others may allow participation until the scheme matures. However, only options exercised within six months of redundancy are not taxable, regardless of the time period between the grant and exercise of the option.

Some companies may give more than the recommended notice period, but they cannot give less than these official guidelines. Employees with more than two years' service have the right to take time off during the notice period to look for new jobs. Many City firms and major organisations offer employees the chance to use 'outplacement services' during their notice period, which can offer everything from workshops on CV preparation and interview techniques to the development of a personal marketing strategy.

"Redundancy does not mean the end of the world."

Pete, a former production director of a large manufacturer, was made redundant at the age of 50 when his company was sold to a competitor. He used Appleby Associates, an outplacement service, to help him return to the job market. A career consultant first helped Pete come to terms with the shock of his redundancy, and then worked with him to identify his skill sets and interests. He now works as an operations director with a 5% equity stake in a smaller manufacturing company.

Peter Murgatroyd, director of DBM, an outplacement service, adds: "Experience has shown us and our clients that redundancy does not mean the end of the world. By seeing redundancy as a natural career break, people can not only come to terms with the fact but also see it as a door opening to new employment opportunities that they might not have considered before, often resulting in a more fulfilling and meaningful working life."

Karen Green, a former sales and marketing executive at Boots, took voluntary redundancy in 1992 and "decided it was time to take the plunge and do something different". She dabbled in the property market, and then embarked on a Change Your Life in Seven Days course, held by renowned hypnotherapist Paul McKenna. 'I realised that I wanted to be more involved in helping people get fit and improve their eating habits, and so undertook a part-time personal training and nutrition course,' Green says.

It opened her eyes. Green realised that she would like to run her own fitness business, and subsequently bought Finbow's Health and Fitness in Stapleford. 'It proved to be the most challenging and rewarding purchase of my life,' she says. Finbow's now has more than 500 members, and Green is branching out into new areas, including working with Nottingham Trent University researching the impact healthy eating has on cognitive function.

Last year author and journalist Toby Young was fired from his position as a column writer on a national broadsheet last year. "The only decent strategy – and I've lost over a dozen newspaper columns in my time - is not to dwell on it," he recommends. "The crucial thing is not to be bitter. When I landed the column from which I was fired, my predecessor called my wife and told her I was taking food out of the mouths of his children." Young did not make a similar call.

By Helen Dunne