Redundancy Pay Explained
There are number of reasons behind this such as the business changing environments by doing things in different ways; for example using new machinery or it could be because the business is moving location or closing down. In order for a redundancy to be used in terms of releasing staff members, it must be shown that the job role will no longer exist within the company.
Employers must use reasonable and objective techniques as a way of selecting members of staff for redundancy. Most commonly, employers will base their decisions on things such as the members of staff that have not been in the company for as long, volunteers (self-selection), qualifications and experience and disciplinary records.
Employers may choose to ask staff to reapply for their own jobs as a means of deciding who stays. However in some cases, the employer may offer a different role in the company is there is one available.
Statutory Redundancy Pay
If you have been an employee for two years or more to your company, you will be entitled to a statutory redundancy pay.
The statutory redundancy pay consists of half a weeks pay for each full year you were under the age of 22, one weeks pay for every full year you were over the age of 22 (but under 41). This length of service will be capped at a maximum of 20 years. The weekly pay for this is also capped at £464, therefore making the maximum amount of statutory redundancy pay £13,920.
You can calculate how much redundancy pay you are entitled to using the redundancy pay tool found on the GovUK website. It will use your weekly pay, age and number of years working at the company to find out how much pay you should be receiving.
Redundancy and Cases of Exceptions
There are a few cases in which the employee is not eligible to receive statutory redundancy pay. This will be if the employer decides that the employee will not be made redundant from the company or they are offered a suitable alternative job, which if turned down by the employee without valid reason will result in no redundancy pay.
Those that work as merchant seamen, crown servants, members of the armed forces, in the police service, or as an apprentice will not be eligible to receive any redundancy pay.
Employees are eligible for statutory redundancy pay if they have been temporarily laid off. This means they have been without pay or less then half their normal weeks pay for more than four weeks consecutively or more than six non-consistent weeks in a period of 13 full weeks. In this case, the employee should contact their employer through a letter stating that you intend to obtain the statutory redundancy pay for your temporary lay-off.
The employer must be contacted within the last four weeks of the last non-working day. If the letter is not responded within seven days of it being received, it is recommend that you write to them again, giving them your notice. The only time that the claim could be rejected is if your normal work is recommended to start as normal within four weeks and continue like that for a minimum of 13 weeks.
If you are still confused about what pay you should be receiving after being made redundant there are a number of places you can seek support from.
The JobCentre is able to provide advice through their Rapid Response, for those that are unsure. Always check your Contract of Employment, as it will contain important information about these kinds of situations. It may contain limits of what you are entitled to do after being made redundant, such as challenging your employer for a period. If this is the case, you need to contact your employer and ask them to drop the restrictions. It must be confirmed in writing.