Dean Wilson Laing on redundancy and what to expect

Victoria Wright of local solicitors Dean Wilson LLP answers questions on Employment Law

If you are unfortunate enough to be made redundant, what payments can you expect to receive and what else does the law provide for?

Firstly, employees are entitled to a statutory redundancy payment. This payment is calculated based upon your weekly wage, age and length of service.

The calculation is:
• Half a week’s pay for each complete year of employment below the age of 22;
• A full week’s pay for each complete year of employment between the ages of 22 and 40 inclusive; and
• A week and a half’s pay for each complete year of employment aged 41 or above.

You cannot be given statutory redundancy pay for more than 20 years’ employment. Only employees with more than 2 years’ service are entitled to a payment and a week’s pay is currently capped at £464.00.

So the maximum statutory redundancy payment is currently £13,920.00.

There is an online calculator at: www.gov.uk/calculate-your-redundancy-pay/
A statutory redundancy payment is not taxable.

Secondly, employees are entitled to work their notice period or to be paid in lieu of notice. The statutory minimum notice is 1 week’s notice for each year if employed between 2 and 12 years and 12 weeks’ notice if employed for 12 years or more. Contractual notice may exceed the statutory minimum, but it cannot be less. The cap on a week’s pay for calculating a statutory redundancy payment does not apply to the notice payment.

Upon termination of employment, an employee should also be paid for accrued but untaken holiday, although an employer may direct that outstanding holiday is taken during a notice period.

Thirdly, employees under notice of redundancy and with 2 years’ service are entitled to reasonable paid time off during working hours to look for new employment (including time off to attend
interviews); or to make arrangements for training for future employment.

A redundancy payment may affect the right to claim benefits and being made redundant may mean losing the entitlement to claim Working Tax Credit, although some people can continue to receive it for four weeks after they lose their job. Advice can be sought from Jobcentre Plus, HMRC or from the Citizens Advice Bureau.