I am being made redundant at work. What will my redundancy payment be?

Published: 27th April 2012
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Introduction

You are entitled to statutory redundancy pay if you have two year continuous service. The amount will be determined on the basis of:



  • Your age;

  • Your weekly pay; and

  • Duration of continuous service.


Your employer must pay you:



  • 1.5 weeks pay for every full year worked whilst you are of 41 year old and over ;

  • 1 weeks pay for each year worked between the ages of 22- 40;

  • 0.5 weeks pay for each year worked under the age of 22.


What is the limit of statutory redundancy pay?

The statutory maximum weekly wage is £430. The maximum statutory redundancy pay payable is £12,900.


Is a tax levied on statutory redundancy pay?

No, there is no tax on statutory redundancy pay because it's not more than £30,000. Any payment other than statutory redundancy pay is subject to tax and National Insurance.


When to file a claim to an employment tribunal?

You have six months from the date of employment ended to make a claim to an employment tribunal if you are disagree or your employer fail to pay you statutory redundancy pay. Employment tribunal can extend the period of six month for making the claim. You can apply to the Department for Business, Innovation & Skills for a direct payment from the NI Fund if your employer fails to pay you.


What are my other redundancy rights?

You have following rights other than the statutory redundancy pay. You have a right to:



  • be offered suitable alternative employment;

  • have a trial period in the alternative employment without losing their right to statutory redundancy pay;

  • reasonable time off to look for a job or to arrange training;

  • not be unfairly selected for redundancy.


On what grounds can an employer make my job redundant?

Section 139 (1) of the Employment Rights Act 1996 states that employer can make redundancies in the following situation. When



  • The business or part of business ceases;

  • Place of business has been moved; or

  • Employee nature of job has been ceased or diminished.


Is it necessary to issue warning letter before making me redundant?


Yes, it is necessary that employer must give you warning letter about making the redundancy. The letter must provide you the detail and reason for making the redundancy. It is also called first step of consultation. It is the duty of the employer to inform and consult employee if the information and consultation (I&C) agreement is in place.

 


Net Lawman provides:


Redundancy confirmation: warning letter to employee

  • The main contents of this document are:

  • Details of the parties involved;

  • The legal position;

  • Employer’s legal rights;

  • Proposed course of action.

  •  

     Is it the duty of the employer to offer alternative employment?

    Your employer must try to offer you alternative employment within the Organisation and must consider any alternatives to making you redundant.


    Conclusion

    Your employer must provide you the notice for making your employment redundant. The notice periods are:



    • at least one week’s notice if the length of your service between 1 month and up to two years;

    • one week’s notice for each year if length of your service between two and up to 12 years

    • 12  weeks’ notice if length of your job is 12 years or more


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