Redundancy: your rights
- Being selected for redundancy
- Statutory redundancy pay and enhanced redundancy payments
- Your notice period
- Your consultation period
- Redundancy and suitable alternative employment
3. Redundancy pay
Statutory redundancy pay
If you’re an employee and have been working for your current employer continuously for two years or more and have been dismissed for the reason of redundancy then you may be entitled to receive statutory redundancy pay.
How to calculate your statutory redundancy pay
The value of your statutory redundancy pay is calculated by using your age, your gross weekly wage (subject to a cap of £464 per week), and the number of years that you have continuously worked for your employer.
- Half a week’s pay for each full year that you have worked when you were under 22
- 1 week’s pay for each full year you have worked between the ages of 22 and 41
- 1 and a half week’s pay for each full year you worked when you were 41 or older
You may not be entitled to receive statutory redundancy pay if any of the following apply:
- You are not an employee
- You haven’t worked for your employer for two years or more continuously
- You haven’t been dismissed for redundancy
- Your employer decides to not make you redundant and keeps you on
- Your employer offers you suitable alternative work which you unreasonably refuse to take
Further, you will not be entitled to statutory redundancy pay if you fall into any of the following categories of workers:
- Merchant seaman, former registered dock workers or share fishermen
- Crown servants, members of the armed forces or police services
- Apprentices who are not employees by the end of their training
- A domestic servant who is a member of the employer’s immediate family
Enhanced redundancy pay
You may be entitled to receive an enhanced redundancy payment from your employer, even if you are not entitled to be paid statutory redundancy pay.
An enhanced redundancy payment is normally a contractual entitlement which you are entitled to receive under the terms of your contract of employment or because your employer has a custom or practice of paying such a payment to employees that it is making redundant. The value of an enhanced redundancy payment will generally be at the discretion of your employer, although you may be able to challenge the amount you are being paid if it isn’t consistent with what your employer normally pays in such circumstances.
Short-term and temporary lay-offs
You can claim statutory redundancy pay if you are otherwise eligible and have been temporarily laid off (without pay or for less than a week’s normal pay) for either:
- More than 4 weeks in a row; or
- More than 6 non-consecutive weeks in a 13 week period
You must write to your employer within 4 weeks of your last non-working day in the 4 or 6 week period to inform them that you intend to claim statutory redundancy pay.