Redundancy Pay - What am I entitled to?

Once you have worked in the same job for a minimum of two years continuous service, your employer is legally obliged to pay you redundancy money. The legal minimum amount that you can be paid when you are made redundant after having worked in your job for at least two years is called ‘statutory redundancy pay'. You may be entitled to more redundancy pay if your employment contract dictates, but those who are eligible can not be paid less that the statutory amount.

Statutory Redundancy Pay

Statutory redundancy pay is the minimum legal amount that can be paid to a redundant employee who has been in their job for at least two continuous years. The employment contract may dictate different terms but they can only ever be more favourable than the statutory redundancy pay and never less. This means that in some instances, employees who have worked in their job for less than two years, may be entitled to redundancy pay or that larger sums may be awarded if the employment contract says so.

The amount of statutory redundancy pay that an employee receives will depend on how long they have worked in the job, their age and their salary at the time of redundancy.

Your statutory redundancy pay entitlement is calculated based on the following rules:

• 0.5 week's pay for each year of service while you were under 22 years of age
• 1 week's pay for each year of service between the age of 22 and 41 years old
• 1.5 week's pay for each year of service over the age of 41 years old.

The weekly statutory payment is capped at £489. So even if you earn £800 per week, for the purpose of statutory redundancy payments, it would be calculated based on £489 per week.

A maximum of 20 years service can be taken into account, and they must be full years of continuous service.

There is a maximum amount of statutory redundancy pay that an employee can receive. In 2017/2018 the maximum sum is capped at £14,670, even if their earnings or length of service suggests that this amount should be higher.

Discrepancies with Redundancy Pay

If an employee believes that their employer is not paying the correct amount of redundancy pay or if they believe that they are being treated badly through the redundancy process, they should raise their concerns with their employer in the first instance. If the employer has a trade union, they may also approach them for support.

If concerns are not addressed in an acceptable way, the employee can make a formal complaint through their work's grievance procedure or could contact Acas (the Advisory, Conciliation and Arbitration Service) who will provide confidential and free advice.

If discrepancies are still not resolved, the employee might consider taking their case to an employment tribunal, usually through an employment law solicitor.