Most employees have a statutory right to redundancy payments
There are a few exceptions and some people are not entitled to redundancy pay. These include:
- people with less than two years' service;
- people who unreasonably refuse an offer of suitable alternative employment;
- employees who have adopted 'employee owner' or 'employee shareholder' status.
Service is counted up to a maximum of 20 years.
- Each year of service from age 41 onwards entitles a person to 1.5 weeks' pay.
- Service between ages 22 and 41 entitles a person to one week's pay per year.
- Service aged under 22 entitles a person to half a week's pay per year of service.
A 'week's pay' is based on actual income (or average weekly earnings).
- This is capped at £525 a week.
- Maximum statutory redundancy pay is therefore 20 x 1.5 x £525 = £15,750.
Visit the GOV.UK website to work out the payment owed to an employee being made redundant.
Browse topics: Employment law