If you are being made redundant, and if you have over two years continuous service, you will be entitled to a Statutory Redundancy Payment.
The Statutory Redundancy Payment is calculated based on a week’s gross pay to a maximum of (currently) £643 per week (£571 for redundancy before 6 April 2023), multiplied by full years worked and multiplied by 1.5 for years worked over the age of 41.
It’s worth noting that even if you have been employed for four years and ten months, the statutory payment will only be based on four full years’ service, though your employer might agree to round up five years.
So for example:
- Someone aged 35, employed for four years and earning £1,000 gross per week will receive a statutory redundancy payment of £2,572 (4 x £643)
- Someone aged 43, employed for four years and earning £1,000 gross per week will receive a statutory redundancy payment of £3,215 (2 years x £643 and 2 years x £643 x 1.5)
- Some aged 50, employed for four years but earning £400 gross per week will receive a statutory redundancy payment of £2,400 (4 years x £400 x 1.5)
Do remember that in addition, you will be entitled to statutory notice of one week for each full year worked to a maximum of 12 weeks. So if you have eight years’ service, but only a contractual entitlement to notice of one month, you will be entitled to eight weeks’ notice. The employer does not have to give you payment in lieu of notice, but that often happens.
You will also be entitled to payment in lieu of any pro-rated holiday accrued but untaken to the termination date.
Do try our redundancy pay calculator. Do also read our article on when redundancy goes wrong and our page on unfair dismissal. We are redundancy solicitors in London.