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If you are facing redundancy at work, it is important to know what you are entitled to. Your redundancy pay entitlement will depend on a number of factors, which include:
If I’m made redundant what am I entitled to?
We always recommend checking your employment contract to see if you are entitled to enhanced redundancy payments. If you are not entitled to enhanced redundancy payments, then you will be entitled to statutory redundancy pay. How this is worked out is based on your length of service and your age, these payments are currently capped at £15,750.
An independent public body called ACAS, who offer impartial advice to both employee and employers, state that redundancy pay should be worked out on the following basis:
For more information on ACAS redundancy pay, go to the ACAS website.
If you are made redundant, you will be entitled to, at the very least, (as long as you have worked there for a month) one week's notice period. How long your notice period is will depend on either what is written in your contact or how long you have worked for the company. The legal minimum notice period is as follows:
Generally, it is up to your employer if they want you to work your notice; however, if they don't wish you to, then this can pan out in two different ways:
This is when you are given a lump sum for your notice period and your employment is terminated straightaway. Also known as PILON, this option may mean, subject to post-termination restrictions, that you may be able to start a new job straight away.
If your employer offers you garden leave, also called gardening leave, then you generally won’t have to come into work, but you are still considered an employee of the company and must adhere to all of your contractual obligations. This means you can’t start a new job until your garden leave comes to an end. You can, however, look for and secure a new role. Depending on your contract or settlement agreement, you may be subject to restrictive covenants, that put restrictions on who you can work for, for a set period of time.
Depending on the reasons behind the redundancy, you may be offered a settlement agreement. This could mean you are offered more than the statutory minimum. Any compensation payments offered in such an agreement will only be subject to tax if the total amount is over £30,000. Before signing a settlement agreement for redundancy, you will need to seek legal advice from a qualified solicitor or an authorised representative of a trade union for it to be legally binding. Read our guide to settlement agreements here.
If you need legal advice on whether you are receiving a fair redundancy package or if you think your redundancy was unfair, then contact our experienced redundancy solicitors today on 0161 696 6170.
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