Redundancy: Your Legal Entitlement
Employers are making so many cut backs at the moment. Andrea Cox, from Bennett Richmond Solicitors, provides us with some useful information if you find your employment is going to be, or has been, terminated.
Redundancy
If you are made redundant and are 18 or over and have been continuously employed in a job for more than 2 years you are most likely to be entitled to statutory redundancy payment.
This is calculated using your average weekly earnings and how many full years service you have had at the company. This is limited to £330 (£350 from 1 February 2009) per week and up to 20 years.
To calculate the number of weeks pay you are due...
- 0.5 week's pay for each full year of service where age during year less than 22
- 1 week's pay for each full year of service where age during year is 22 or above, but less than 41
- 1.5 weeks pay for each full year of service where age during year is 41+
These payments are the statutory minimum. You may negotiate higher payments with your employer.
Redundancy payments up to £30,000.00 are normally tax and N.I. free.
Notice pay, holiday pay and outstanding wages are subject to normal tax and N.I. deductions.
Notice Pay
You will also be entitled to your notice period as per your contract. If it's not stipulated in your contract, and your employer terminates your employment you will be entitled to one weeks notice (or payment in lieu) to a maximum of 12 weeks.
Holiday Pay
Ensure that you receive all outstanding holiday pay due to you. If you are made redundant part way through the holiday year you will be due the relevant apportionment.
E.g. If the holiday runs April - March and you are made redundant at the end of the December, you would have been entitled to 9 months holiday, which at the minimum of 20 days holiday pro rata works out at 15 days.
If you have not taken all of these days, you will be entitled to payment in lieu.
Insolvent Employer
If you are made redundant as the result of your employer going insolvent, you may still be entitled to a redundancy payment. The insolvency practitioner should send you the relevant forms but a claim should be made to the Redundancy Payments Office, which for the North East and Cumbria is based at Edinburgh (telephone 0131 316 5600).
These redundancy payments are made out of the National Insurance fund. If you have outstanding wages you can also submit a claim for the same up to the value of £800.00.
Other information
If more than 20 people have been selected for redundancy, a consultation process should have taken place.
If you believe that you have been unfairly selected for redundancy you may also have a claim for unfair dismissal and legal advice should be sought immediately.
Any claim to the Employment Tribunal for unfair dismissal or unpaid redundancy/wages should be made within 3 months of the termination of your employment so it is important to seek legal advice as soon as possible.
