What is Statutory Redundancy Pay?

If you live in the UK, have been with the same employer for at least two years then you are entitled to statutory redundancy pay. Redundancy payments are not liable for tax and are based on an employee's length of service. No redundancy payment will be forthcoming if a person who has been made redundant from one job, is then offered a similar position with equivalent salary in the same company.

Why Does Redundancy Occur?

There are several reasons why an employer may have to make one or more of their employees redundant. If the employer goes out of business and is unable to meet their responsibilities then this situation would result in the redundancy of the entire workforce. Sometimes a company will have more than one branch to their business. If the branch where you are working is closed because it is not attracting enough business then people working at that branch will be made redundant. There are occasions when the existing number of staff is too high for the job at hand and this is a situation that can result in redundancy for one or more employees.

How Are Redundancy Payments Calculated?

There is no hard and fast rule regarding redundancy payments, other than the fact that the employee should have had two years or more continuous employment with the same company. When they are calculating redundancy payments, most companies work on the basis of one weeks pay for every year worked, with most taking the maximum as twenty weeks. The maximum amount of that weeks pay in redundancy terms was capped in 2007 at £310 per week. However, under the terms of the Employment Act there are people who are not entitled to a redundancy payment when their job comes to an end against their wishes.

Members of the armed forces, members of the House of Lords and the House of Commons staff do not qualify for redundancy payments. If you work in someone's home as their domestic servant then you are not entitled to any redundancy payment if your job ends. If you are a servant of the crown or you hold public office then you will be excluded from obtaining any redundancy payments

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Tribunals

If you and your employer cannot come to an agreement regarding redundancy and payment then you can take your employer to an employment tribunal. However, any steps that you may take regarding redundancy and your redundancy payment have to be undertaken within six months of your job ending.

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