You are normally entitled to statutory redundancy pay if you have worked for your employer for at least two years:
- - Half a week’s pay for each year that you were under 22
- - One week’s pay for each year aged 22 to 40
- - One and a half weeks’ pay for each year aged 41 or over
Statutory redundancy pay is based on your gross weekly wage up to a maximum of £464 and a maximum of 20 years’ service — so total statutory redundancy pay cannot be higher than £13,920 (one and a half weeks’ pay at £464 for 20 years). The GovUK site has a useful statutory redundancy pay calculator that may help to clarify what you’d get.
You may be entitled to a higher level of redundancy pay if your contract says so, or if your employer has typically offered more generous redundancy payments in similar situations. You may want to take legal advice before you accept any offer made by your employer.
In addition to your redundancy pay, you are entitled to redundancy notice. Your employer can insist that you continue to work (and be paid) during your notice period. Alternatively, they may not require you to work your notice, offering ‘pay in lieu of notice’ instead. Pay in lieu of notice may be tax free, depending on your employment contract.
One other thing to note is that there are a number of exceptions that mean you wouldn’t be eligible to receive any statutory redundancy pay if your employer decides not to make your role redundant or you refuse a suitable alternative role within the company (without having a good reason for the refusal).
There are actually some vocations which do not qualify you for statutory redundancy pay. You will not qualify if you are a merchant seaman, a civil servant including those who are police officers or members of the armed services, or an apprentice who has not reached the end of your apprenticeship.