Redundancy: redundancy pay
If you are made redundant you may be entitled to statutory redundancy pay if you have worked for your employer for at least two years. The amount you are entitled to will be based on your weekly pay, age and continuous employment with your employer.
Facts about redundancy pay
You have the right to a statutory redundancy payment if you are an employee who has worked continuously for your employer for at least two years and you are being made redundant.
In general, to be due a payment, you must have been dismissed by your employer rather than have resigned and the reason for dismissal must have been redundancy.
Statutory redundancy pay is also due when a fixed-term contract of two years or more expires and is not renewed because of redundancy.
You do not have to claim statutory redundancy pay from your employer, they should automatically pay it to you. If your employer does not give you statutory redundancy pay when you are entitled to it you should write to them asking for payment. If your employer still refuses to pay you or cannot make the payment you could make an appeal to an Industrial Tribunal.
How much statutory redundancy pay you will receive depends on:
- how long you have worked for your employer
- your age
- your pay
- Fixed-term work
- Are you a 'worker', 'employee' or 'self-employed'?
Directors and other office holders may be employees if they work under a contract of employment. They will not qualify if they do not work under a contract of employment.
A redundancy payment isn't due to you if work picks up and your employer offers to keep you on, or offers you suitable alternative work which you refuse without good reason. If you leave your job for a new one before the end of your notice period, your payment might also be affected.
Temporary lay off
Redundancy pay can be claimed from your employer if you have been temporarily laid off for more than four weeks in a row, or six weeks in a 13-week period. You must make your claim in writing to your employer who may refuse to pay if they believe normal working is likely to resume within four weeks.
As well as a redundancy payment, your employer should give you proper notice of termination of employment (or pay in lieu of notice). Details of the notice period will be in your contract.
Calculating your pay
There may be an arrangement in your contract for how redundancy pay will be worked out. However, if this gives you less than the statutory pay, the statutory amount applies. The first £30,000 of any termination payment is tax-free. More information on whether elements of the payment such as pay in lieu of notice (PILON) is taxable is available from HM Revenue and Customs.
Statutory redundancy pay
The interactive calculator can tell you how much statutory redundancy pay you might be entitled to.
- Calculate your statutory redundancy pay (GOV.UK website)
The total amount you should be paid for redundancy will be based on:
- how long you've been continuously employed
- your age
- your weekly pay, up to a legal limit (current maximum £470)
The current maximum of £470 came into effect in Northern Ireland on 16 February 2014 and will not be increased in the rest of the United Kingdom until 6 April 2014. Therefore the calculator will show the old rate of £450 until 6 April 2014.
What should you do if you have problems?
If you've been made redundant, your employer will normally pay you either on the last day of your notice period, shortly afterwards, or on your next pay day. If you haven't been paid, or if you've been paid but are unhappy with the amount, you should try to sort the problem out directly with your employer first.
Write to your employer explaining the problem and ask for full payment. Your employer should give you a written statement showing how any payment has been calculated. If this doesn't work, you can apply to an Industrial Tribunal. You need to make a claim to the tribunal within six months, otherwise you might lose the right to a payment.
When you make a claim to an Industrial Tribunal you should name your employer as ‘respondent’ on the claim form. If your employer is insolvent you should add the words ‘in receivership’ or ‘in liquidation’ to your employer’s name, as appropriate. You should give the name and address of the receiver or liquidator separately, if you know it.
If your employer can't pay
If they can't pay because they're insolvent, you might be able to get the money from the government.
Where can you get help?
The Labour Relations Agency (LRA) offers free, confidential and impartial advice on all employment rights issues for residents of Northern Ireland. You can contact the LRA on 028 9032 1442 from 9.00 am to 5.00 pm Monday to Friday.
Your local Citizens Advice Bureau (CAB) can provide free and impartial advice. You can find your local CAB office in the phone book or online.
If you have doubts about the way your employer may have calculated your statutory redundancy pay you can call the Redundancy Payments Freephone Helpline on 080 0585 811.