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We can help you through the difficulty of having to make staff redundant and organise Redundancy Pay.

Redundancy Pay

What is a redundancy payment?

A redundancy payment is compensation because a job has disappeared. If an employee is made redundant they may be entitled to statutory redundancy pay if they have worked for the employer for at least 2 years. The amount they are entitled to will be based on their weekly pay, age and continuous employment with the employer.

Employees have the right to a statutory redundancy payment if they are an employee who has worked continuously for an employer for at least 2 years and are dismissed due to one of the possible ways:

  • Closure of a business.
  • Closure of the employee's workplace.
  • A diminishing need for employees to do the available work.

Statutory redundancy pay is also due when a fixed-term contract of 2 years or more expires and is not renewed because of redundancy.

Employees do not have to claim statutory redundancy pay from their employer, it should be automatically paid.


How much should I pay?

How much statutory redundancy pay you will receive depends on:

  • how long the employee has worked for the employer
  • employees age
  • employees pay

Calculating Redundancy Pay

Staff have the right to:

  • half a week’s pay for each complete year of employment when they were below the age of 22
  • a full week’s pay for each complete year of employment when they were between the age of 22 and 40
  • 1 and a half week’s pay for each complete year of employment when they were above the age of 41.

Statutory redundancy pay cannot be given for employment in excess of 20 years.

Employment is counted up to the date the notice runs out. If notice hasn‘t been given, it is the date on which the notice would have run out if it had been given. This will depend on what notice you’re entitled to by law.

Employees may also qualify for pay instead of notice (pay in lieu of notice), in addition to the redundancy payment.

The current weekly rate of Statutory Redundancy Pay for 2017 is capped at £479 or the contracted weekly pay if lower.

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Key Contact: Lynne Auton
Tel: (0845) 308 2288
Email: payroll@payrollsolutions.org.uk
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