Want to talk to an expert employment law solicitor?

You'll receive a callback from a specialist within an hour

If you’re being made redundant from your job then – depending on how long you have worked for your employer – you will be entitled to certain payments from the business that you work for. In this article Employment Law Solicitor Chris Hadrill explores what nature of redundancy payments you should expect if you’re being made redundant.

Broadly speaking, the nature of the payments that you can expect in your redundancy severance package can be split into three different types:

  1. Contractual payments
  2. Statutory payments
  3. Ex-gratia payments

Contractual payments

Contractual payments are – as you’d expect – what you are contractually entitled to. There are a number of types of contractual payment which you could be entitled to upon termination of your employment:

  1. Your notice pay (if you’re being paid in lieu of notice instead of working this it may be referred to as “Pay In Lieu of Notice” or “PILON”) – this will include your wages as well as other contractual entitlements (such as any car allowance, medical benefits etc.) during the notice period
  2. Your accrued but untaken holiday pay
  3. Any bonus that you are contractually entitled to
  4. Any commission you are contractually entitled to
  5. Any contractual redundancy pay (sometimes referred to as “Enhanced Redundancy Pay” or “ERP”)

In order to determine what contractual payments you’re owed you should review the following (if applicable):

  1. Your contract of employment
  2. Any addendums or updates to your contract of employment
  3. Your staff handbook or other similar policies
  4. Any correspondence or documents detailing what the terms of your contract are
  5. Any collective agreement that you’re party to

Statutory payments

In a redundancy situation, you will be entitled to a statutory redundancy payment (or “SRP”) if you have worked for two years or more with your employer. Statutory redundancy pay is calculated using a particular formula based on the number of years (full) service that you have served, your age, and your gross weekly wage. For example, if you are 52, have worked for seven years for your employer, and earned a gross weekly wage of £430 then you would be entitled to the following statutory redundancy payment: £4,515 (1.5 * 7 * £430).

However, although you are statutorily entitled to a redundancy payment if you have two or more years of service with your employer, you may lose your right to a statutory redundancy payment if you unreasonably refuse an offer of suitable alternative employment.

Ex-gratia payments

Ex-gratia payments are discretionary and are generally paid as compensation for the manner of the termination of your contract of employment and, therefore, as a ‘settlement payment’ for any potential or existing claims that you could bring in the Employment Tribunal. For example, if your employer has dismissed you for redundancy but hasn’t undertaken a consultation period, considered any suitable alternative employment for you, or allowed you to appeal against you dismissal (among other things) then your dismissal may be unfair (and you may therefore choose to bring a claim for statutory unfair dismissal). You would – in this situation – be in a position to negotiate an ex-gratia payment with your employer which reflected the strength of your potential claims and the reasonable value of those claims.

So what value redundancy severance package should I expect?

Unfortunately, there’s not a simple answer to this question – the nature and value of the payments that would be reasonable in your situation will completely depend upon the facts that are specific to your situation. However, here are a number of tips for you if you’re going through a redundancy process:

  1. Check what your notice period is and what estimate what value of payment you should expect (i.e. if you are paid £500 gross per week with no other benefits payable and have a notice period of 4 weeks then you should expect a payment of £2,000 gross in respect of your notice)
  2. Check how many days accrued but untaken holiday you will have as of the date of the termination of your employment
  3. Check whether you’re entitled to and what value of statutory redundancy pay you should expect (handy tip: use the Direct.Gov website calculator to work this out)
  4. Get some legal advice from a specialist employment solicitor – you may think we would say this but if you’re being offered a settlement agreement by your employer then a) your employer has a statutory obligation to inform you to obtain legal advice from an independent adviser, and b) your employer will normally pay the majority – if not the whole – of your fees for doing so, so there’s no harm in making enquiries!

If you have an enquiry relating to your redundancy payment or want to obtain legal advice on your settlement agreement then please call our specialist employment law team today on 020 3397 3603.

About Chris Hadrill

Chris is a specialist employment lawyer at Redmans. He specialises in contentious and non-contentious employment matters, including breach of contract claims, compromise agreements and Employment Tribunal cases. He writes on employment law matters on a variety of websites, including Direct 2 Lawyers, Lawontheweb.co.uk, LegalVoice, the Justice Gap and his own blog. Contact Chris by emailing him at chadrill@redmans.co.uk

Want to talk to an expert employment law solicitor?

You'll receive a callback from a specialist within an hour

Share →

Our awards

Request a callback

Your name

Your email

Your telephone number

Contact us

Please feel free to discuss your own position and concerns. Contact your nearest office on:

T: 020 3397 3603
E: enquiries@redmans.co.uk
W: www.redmans.co.uk

Testimonials

4.76 Average

123 Reviews

Jake L

Chris is very professional and calm. Very attentive and patient, been a positive experience having Chris represent me, and would recommend him.

Posted 2 weeks ago

Anonymous

Excellent service. It was a pleasure to work with Chris H, who is brilliant at what he does and very efficient. Their Senior Associate Rana T. is also very knowledgeable and resolves any queries speedily and efficiently. My issue could unfortunately not be resolved, but that was due to my employer and not the firm. Redmans however did all they could. I would definitely recommend them.

Posted 2 weeks ago

Anonymous

Very pleasant and quick to deal with. Mnay thanks.

Posted 3 weeks ago

Anonymous

Easy to get hold of. Quick.

Posted 3 weeks ago

Owen J

Very helpful, efficient service.

Posted 3 weeks ago

Anonymous

I am very lucky that I worked with Mr. Chris Hadrill and he managed my case very progressively with an analytical approach and trustfully. Of course with a very positive result. I strongly recommend Mr. Hadrill to any one seeking for a successful result from a highly qualified solicitor.

Posted 1 month ago

Kulbir S

Amazing, quick friendly service from Chris from the start and Caroline. They made me feel at ease during a difficult time, they understood and advised accordingly and I am really happy with the outcome of my case. Will always advise anyone who needs legal advice to contact Redmans, I’m so glad that I did and can confidently say I don’t think any other firm could have handled my case any better. Well done guys, wish you all the best and please keep doing what your doing, simply the best!

Posted 1 month ago

Mark A

Excellent service - rapid and “to the point” advice given to ensure meeting the target time frame

Posted 1 month ago

Anonymous

Chris Hadrill kept me sane during the negotiations with my employer. He was courteous professional and he cared about doing the best he could for me. I will use Redmans again if ever I need an employment solicitor. Excellent service.

Posted 1 month ago

Muhammad Z

Awesome services. Professionals at their best .

Posted 1 month ago

Anonymous

Thanks for the advice and for negotiating a good outcome. Good to have the support at a very stressful time

Posted 1 month ago

Chloe F

My solicitor at Redmans was very helpful and efficient. Really pleased with the smooth service.

Posted 1 month ago

Anonymous

Chris was absolutely excellent. Clear and concise, offering sound advice.

Posted 1 month ago

Tim O

Experienced and competent advisors

Posted 1 month ago

Rachel A

Quick and expert assistance. I would highly recommend Chris for any of your legal needs.

Posted 1 month ago

Joe S

I was very happy with the service provided by Chris and the team at Redmans Solicitors. I felt very comfortable discussing all matters with Chris and am very grateful for all the help and guidance I was given throughout the whole process. I would definitely recommend Redmans Solicitors to friends and family!

Posted 1 month ago

Anonymous

I had a very good experience working with Chris Hadrill during a difficult and emotional time. This held true from the moment I spoke to him on the phone, to the end of the process. Overall, he was attentive, professional and highly supportive. He provided sound advice and clarity. It was the reviews that led me to Redmans! I was very happy to know they were all true. I highly recommend working with Redmans Solicitors. Thank-you to the entire team!

Posted 1 month ago

Anonymous

Good service

Posted 1 month ago

Anonymous

Excellent professional service. Highly recommend.

Posted 1 month ago

Rob O

Very prompt response and I could not fault the service. My solicitor listened carefully to the details of my case and I felt very confident in the advice I was offered. All emails and work done on my behalf with my former employer was of the highest standard and Redmans helped take a lot of the stress out of the situation for me.

Posted 2 months ago

Mike H

Very professional, friendly, proactive. I would highly recommend Redmans.

Posted 2 months ago