How Much Redundancy Pay Are You Entitled To?

Nobody really wants to think about redundancy pay if they have not been made redundant. However, we live in a constantly changing world and what is happening in a company today may not be what is happening tomorrow. Business practices change over time and skills that may have been highly prized yesterday are no longer in demand tomorrow. Unfortunately, this also means that nobody's job is safe.

If your employer goes broke and the business has to go then all of the employees will be redundant. Company branches that fail to meet targets because there is no longer a demand may also close and those staff who cannot be offered work in other branches will be made redundant. Sometimes a particular skill is no longer relevant, perhaps because the task has now been automated and this too can mean redundancy. When business declines this can mean redundancy if the employer is no longer able to meet their payroll obligations. For this reason both employers and employees need to know about the law governing redundancy and about payments should such an event occur.

Redundancy Pay Entitlements

Employees who have been with a company for two years or more are legally entitled to a redundancy payment of one weeks pay for every year that they have been with the company. So these payments vary depending on an employee's term of service and also depending on their age. Employers have a legal requirement to pay their employees this money. Employers have no legal obligation to make redundancy payments to any employees who have been in their service for less than two years. In cases where employers are required ot make redundancy payments they should provide employees with a statement showing how the payment has been calculated. If an employee feels that they have got less than their fair share of a redundancy payment then they must take their case before an employment tribunal.

Redundancy can be a frightening prospect and as more people today are being made redundant than for many years it pays employees to take out some form of private insurance. If you are suddenly made redundant and have a mortgage to pay, but you have been with the company for less than the required legal time then some form of insurance payout will at least take care of the most important thing, your mortgage - vital if you are not entitled to any form of redundancy pay.

Deminos are HR Outsourcing and employment law specialists. To find out more please call us on 020 7870 1090 or visit http://www.deminos.co.uk