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Redundancy Pay

Career Advice and Help
If you are made redundant you may be entitled to a redundancy payment.
You have the right to a redundancy payment if you're an employee who has worked continuously for your employer for at least two years. Statutory redundancy pay isn't taxable.
Redundancy pay is also due when a fixed-term contract of two years or more expires and is not renewed because of redundancy.

Alternative work
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).

Notice pay
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.
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.
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 £330)
You’ll get:
  • half a week’s pay for each complete year of continuous service below the age of 22
  • a full week’s pay for each complete year of continuous service between the ages of 22 and 40, and
  • a week and a half’s pay for each complete year of continuous service above the age of 41
If you were made redundant before 1 October 2006:
  • service under the age of 18 is not counted
  • your redundancy payment is reduced by one-twelfth for each complete month you were over the age of 64
  • you do not get any redundancy payment if you were over 65
If you've been made redundant, your employer will normally pay you either on the last day of your notice period or 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 asking 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 Employment Tribunal. You need to make a claim within six months, otherwise you might lose the right to a payment.

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.
For general enquiries about insolvency, call the Insolvency Service Helpline on 0845 602 9848 (9.00 am to 5.00 pm, Monday to Friday). For queries about redundancy, call the Redundancy Payments Helpline on 0845 145 0004 (9.00 am to 5.00 pm, Monday to Friday). Or you can fill out an enquiry form on The Insolvency Service website. For queries about redundancy in Northern Ireland call the Redundancy Payments Service on freephone 0800 585 811. The Advisory, Conciliation and Arbitration Service (Acas) offers free, confidential and impartial advice on all employment rights issues. You can call the Acas helpline on 08457 47 47 47 from 8.00 am to 6.00 pm Monday to Friday. 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. Seek legal advice from a Solicitor or Advice Agency on contract conditions.