Redundancy Payments

Redundancy is generally where an employer needs to reduce his or her workforce. It may happen because a workplace is closing down, or because fewer employees are needed for work of a particular kind. Normally your job must have disappeared. It is not redundancy if your employer immediately takes on a direct replacement for you. But it will not matter if your employer is recruiting more workers for work of a different kind, or in another location.

The statutory redundancy payments scheme aims to ensure that those who are dismissed through no fault of their own receive compensation. Employees with more than 2 years service are statutorily entitled to a lump sum from their employer, based on their age, length of service and contractual earnings up to a maximum limit which is currently £500 per week (from 14th February 2016) and is reviewed annually.

For redundancies made on or after 1 October 2006, the amount will be calculated as:

  • Up to the age of 21, you will receive half a week’s pay for each completed year of service.
  • 22 – 40 years of age, you will receive one week’s pay for each completed year of service.
  • 41+ years of age, you will receive 1½ weeks' pay for each completed year of service.

Calculate your statutory redundancy pay

Redundancy Pay Table

Telephone Enquiry Point

The Agency’s Enquiry Point is available to employers, employees, trade unions and others. Enquiry Point advisors provide information and advice on a wide range of employment matters. The Enquiry Point is also an important contact point for identifying circumstances, or clients, who would benefit from being referred to other Agency services.

The Enquiry Point provides clear, confidential, independent and impartial advice to assist the caller in resolving issues in the workplace.

While the advisors cannot provide a legal opinion they can help callers gain a better understanding of their rights and responsibilities as well as identifying possible options to help resolve their issues.

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