Redundancy is a ‘fair’ means of dismissal by your Employer if the procedures they follow and the circumstances are correct. A Redundancy situation is applied when there is no more, or not enough, work for you and your colleagues (for example if your employer closes or relocates the business, or now needs fewer employees).
Notice of Redundancy
The minimum notice of redundancy your Employer must give you is 1 week for each completed year of service you have with them (up to a maximum of 12 weeks). You should be paid for your notice period or receive pay in lieu of this time.
Statutory Redundancy Pay (SRP)
This is calculated depending on your age, length of continuous service with your employer and your weekly earnings:
- You receive half a weeks pay for each completed year of service up to the age of 21
- You receive one weeks pay for each completed year of service between ages 22 and 40
- You receive one and a half weeks pay for each completed year of service over the age of 41
- The maximum number of year’s service that can be counted is 20
- SRP is based on your ‘weekly’ pay, under your contract of employment at the time of redundancy – therefore if you currently work part-time (but have previously worked full-time and your current part-time hours are on a permanent contractual basis and are your normal working hours now) your employer is only obliged to calculate your redundancy payment on your reduced part-time salary
- There’s also a limit on what can be counted as a weeks pay – £525 per week from 6th April 2019, in England, Scotland and Wales; in Northern Ireland it is £547 per week. This will increase from April 2020 (in England, Scotland and Wales) to £538 per week
- The total maximum statutory redundancy pay you can receive is £15,750 per week from 6th April 2019, in England, Scotland and Wales (increasing to £16,140 from April 2020); in Northern Ireland it is £16,410
- SRP is not currently taxable
- To calculate a week’s pay (which you need to do for redundancy payments, holiday pay and pay during notice periods) this calculator on the Gov.uk site can help.