Questions and Answers - Advice on Redundancy

What are my rights to receive redundancy pay?

What you are entitled to will depend on a number of factors, including whether you are legally classed as an employee and you will need to have worked for your employer for at least two years before they can make you redundant. Otherwise, they may be able to dismiss you from the position in a different way.

How much redundancy pay am I entitled to?

The amount of redundancy pay you will get depends on your age and how long you have worked for your employer. It will also depend upon what is in your contract. Some contracts provide for an uplift on the redundancy payment. There are also some collective agreements that provide certain members of staff in some professions with an enhanced redundancy payment. Checking these documents is a good starting point.

How will the redundancy pay be worked out?

The employer will base the redundancy payments on your earnings before tax, the number of years you have worked for your employer and your age. If you are under 22 you will generally receive half a weeks’ pay for each full year of service. If you are aged between 22 – 41, you will receive one weeks pay for each full year you worked after age 22. If you worked for your employer before reaching the age of 22, you will also receive half a weeks’ pay for each full year you worked before that. If you are aged 41 or over, your employee has to give you at least 1.5 weeks pay for each full year you worked after the age of 41. In addition, to one weeks pay for each full year you worked when aged between 22 and 41 and half a weeks’ pay for each year you worked before you became 22.

There is a redundancy pay calculator on the government website that can assist you.
www.gov.uk/calculate-your-redundancy-pay

When will I get paid the redundancy sum?

Redundancy of payment should be paid no later than the final pay date, unless it is agreed with your employer in writing that it should be on another date. They should also tell you, in the event they do not intend to pay it with your usual monthly salary or final salary. They should give you notice in writing of this.

Are there limits on how much redundancy pay I may receive?

Redundancy pay is limited to 20 years of work. There is to say, in the event that you were due to receive one weeks pay for every year of work, you would receive no more than one week for every year. The maximum weekly amount used to calculate redundancy pay is £538, even if you earn more than that. Therefore, the total that any person can receive is no more than £16,140.

What if the employer refuses to pay redundancy, but I am entitled to?

I would advise writing to your employer as soon as possible and set out that you are entitled to the pay and that it should be paid no later than your final pay date in respect of any unpaid salary. It is worth providing them with evidence of your entitlement and how long you have worked for the business, if you are still in possession of a letter when you started employment, or any evidence of pay increases, or changes of position, these can assist.

How much notice does my employer need to give and do they need to pay me in the meantime?

Your employer will need to pay you until the formal end of your employment, so they will need to keep paying you until a time that a finish date is agreed with them. They need to give you sufficient time in advance as notice of their intention to make you redundant. How much time in fact depends upon how long you have worked for the employer. The following will apply;

If you have worked for them between 1 month and 2 years – it is 1-week notice

2 years to 12 years – a minimum of one weeks’ notice for each year you have worked

More than 12 years – the minimum notice period is 12 weeks

Do I have to work my notice period?

Some employers will agree to pay you in lieu of notice if it is in your contract. Which means that you can get paid for not working your redundancy period, however, if it does not state in your contract that you can have pay in lieu of notice, they can offer you this and if you accept you should get the pay along with anything else stipulated in your contract.

Can I leave before the end of the notice period and start a new job?

There is nothing to stop you from asking your employer if you can start another job earlier. It is important to get their agreement. If you do not, they could consider you that you have effectively resigned and you could loose your eligibility for a redundancy pay owing. It is important to get any agreement in writing.