|"Independent Redundancy Help" - Established since 2000|
How Much Redundancy Pay Could You Expect?
Yes. You will be entitled to a redundancy pay if: -
Directors may be employees if they work under a contract of employment. They are unlikely to qualify if they have a controlling interest in the company.
Many employers unfortunately will only pay the statutory minimum redundancy pay, whilst others are more generous, for example, one month’s gross salary for every year worked. Generally, blue-chip companies and financial institutions are found to be more generous with their payments.
It is also the case, that even where an employer may only pay the statutory minimum, they will enhance the redundancy payment by making a goodwill lump sum without reference to a specific formula. This is sometimes the case where the dismissal based on a purported redundancy is on shaky grounds.
An employer may make an enhanced payment to take into account any shortcomings in the actual redundancy procedure and to ward of any potential tribunal claim. In turn the employee may be asked to sign a compromise agreement which will prevent you form bringing any subsequent unfair dismissal claim. A specialist employment law solicitor is best placed to negotiate a severance package for you after taking into account the strength of your claim.
Here at Redundancy Help we have an Employment Law Specialist who can look at your compromise agreement and give you advice. Click here for further details
If you are being paid only the statutory amount, this will be governed by:
The amount of redundancy pay is calculated as:
Redundancy Payments Offices - A helpline is available to answer any of your queries, no matter where in England, Scotland or Wales your firm is based. The number to ring is 0845 145 0004.
If the company you were working for is paying the redundancy, then it should be paid on the last day that you work or as soon as is possible.
This is the date that you were given notice of your redundancy. The minimum notice by law is usually one weeks notice per year of employment up to a maximum of twelve weeks.
The amount of a week's pay to be taken into account is the amount you are entitled to under the terms of your contract of employment on the 'calculation date'.
Your employer must give you a lump-sum payment if:
You will not qualify :
What does a week’s pay refer to?
Your pay is averaged out over a 12 week period before the “calculation date”. There is a maximum statutory limit which is reviewed each year in February. Employers can choose to pay more but at the minimum they need to pay at the rate the government has set.
I work shifts how do they work out my redundancy payment?
If your normal working hours varied from week to week because of shift work, and your earnings varied as a result, a similar calculation is done but the average hourly earnings are multiplied by the average weekly hours over the same 12 weeks.
My hours were always different each week what will that mean to my payment?
If your earnings changed from one week to another because of piecework or productivity bonus arrangements, your week's pay is worked out by multiplying the number of hours you normally worked in a week by your average hourly earnings over the 12 complete weeks of work before the calculation date. Only hours actually worked are taken into account. If the hours used in the calculation include hours outside normal working hours and paid at higher rates, the higher rate is ignored and the hours are worked out at the normal basic rate.
Do I need to have worked a certain amount of hours before I qualify for redundancy payment?
It doesn’t matter how many hours you work if you have worked continuously for the same employer for two years you are entitled to have a redundancy package.
If my employer asks me to do less hours during my notice period do I have to take a cut in wages?
No, you should be being paid the same weekly wage as you were receiving before the notice period was given.
For more in depth information click here:
There is no need for you to make a claim unless your employer fails to pay you or disputes your entitlement. If there is a failure to pay, you must make a written request to your employer or to an employment tribunal within six months of the date the job ended.
You should not have to pay tax on redundancy payment up to £30,000 as a result of HM Revenue and Customs (formerly Inland Revenue) exemptions.