Who is entitled to a Redundancy payment -

You are entitled to a payment from your employer if you are an Employee and:

• you have a permanent (open-ended) contract and
• you have at least 2 years continuous service and
• you are made redundant.

If you are employed on a Fixed Term contract, with 2 years continuous service, which ends without being renewed because of a redundancy situation you may also be due a redundancy payment. The information on the Direct Gov site is useful – http://www.direct.gov.uk/en/Employment/Understandingyourworstatus/Fixedtermworkers/index.htm

Information on Dismissal by Redundancy -

Redundancy is a ‘fair’ means of Dismissal by your Employer if the procedures they follow and the circumstances are correct.  A Redundancy situation is applied when there is no more, or not enough, work for you and your colleagues (your employer closes or relocates the business, or now needs fewer workers).  Your employer needs to select those who are at risk of redundancy in a fair way, consider offering you any alternative work that is available, consult you properly before making you redundant and pay you your Statutory Redundancy Pay entitlement – otherwise without all these steps being taken your Redundancy could be seen as an Unfair Dismissal by an Employment Tribunal.

Other useful information about Redundancies:

• Before 1st October 2006 you could not receive a redundancy payment if you were aged 65 or over, but this limit has now been removed.
• You will not be due a redundancy payment if you resign.
• If your employer needs people to volunteer to take redundancy and you volunteer and are accepted you will still qualify for a redundancy payment.
• If you have been given notice of redundancy you can ask to leave earlier.  If your employer agrees to this you will still qualify for a redundancy payment.
• If your employer offers you a new job that is a reasonable alternative to your old job you can accept the new job on a 4 week trial period.  If at the end of the 4 weeks you do not want to stay in the new job you will still qualify for a redundancy payment (if you stay in the new job after these 4 weeks you will be considered to have accepted the new job, if you don’t say differently, and will forfeit your redundancy payment).
• If you are offered a new job that is not considered a reasonable alternative to your old job (e.g. worse conditions of employment, different responsibilities or location) you can turn the new job down before the end of the trial period and take your redundancy payment.
• If you refuse an offer of a new job that is considered a reasonable alternative without a good reason you may not be entitled to a redundancy payment.
• When you receive Statutory Redundancy Pay (SRP) this does not affect any entitlement you have to claim Job Seekers Allowance or other benefits.
• You have a legal right to take time off to look for work if you are declared redundant (and have at least 2 years service).
• The first £30,000 of redundancy pay is tax free at the moment.

Notice of Redundancy:

The minimum notice of redundancy your Employer must give you is 1 week for each completed year of service you have with them (up to a maximum of 12 weeks).

Your employer may offer enhanced redundancy notice periods in your contract.

Statutory Redundancy Pay (SRP):

This is calculated depending on your age, length of continuous service with your employer and your weekly earnings.

From 1st February 2009 SRP is calculated as follows:

• You receive half a weeks pay for each completed year of service up to the age of 21
• You receive 1 weeks pay for each completed year of service between ages 22 and 40
• You receive 1 and a half weeks pay for each completed year of service over the age of 41.
• The maximum number of year’s service that can be counted is 20.
• There is also a limit on what can be counted as a weeks pay – £350 per week is the maximum (rising to £380 per week from 1st October 2009).
• SRP is not taxable.

To calculate your SRP click here

NB Your employer may offer more generous redundancy payments in your contract (but SRP will be included within this higher payment).

Image by Thomas Hawk

If you work in the UK Media Industries and have a question about this or any other topic, please e-mail us at workline@freelanceadvisor.co.uk

Please note that the advice given on this website and by our Advisors is guidance only and cannot be taken as an authoritative interpretation of the law. It can also not be seen as specific advice for individual cases. Please also note that there are differences in legislation in Northern Ireland.