Here at Lincs Law Employment Solicitors, we understand that being made redundant can put significant pressure on you and your family. In these circumstances, it is very important you understand what payments you should receive. As specialist employment solicitors, we are here to help you. Please read on to find out more.
If you have been made redundant, you will be entitled to your contractual payments. This includes your notice pay, payment for accrued but untaken holiday and other payments such as any bonus, commission, expenses.
Depending on your length of service, you may also be entitled to a redundancy payment. Please read below to find out more.
Contractual Payments
If you have been made redundant, you will be entitled to your contractual payments as below.
Notice Pay
If you are dismissed by reason of redundancy, you are entitled to notice pay. For more information about your entitlement to notice pay, please see our blog here – https://lincslaw.co.uk/blog/leaving-your-job-make-sure-you-understand-your-notice-entitlements/
Essentially, if you have been dismissed by reason of redundancy, you could receive your notice either:
a) Through the passage of time. This means your employer gives you notice of your dismissal, but you remain employed throughout your notice period (either working for your employer or placed on Garden Leave). During this time, you receive your usual pay.
b) Payment In Lieu Of Notice (PILON). This is where your employment is ended immediately, and you are paid your notice period as a lump sum. Importantly, your employer should only use PILON if this is expressed as an option in your contract of employment.
Holiday Pay
If you have been dismissed by reason of redundancy, you should also be paid for your accrued (i.e., built up) but untaken holiday. Alternatively, if you are still working for your employer, you may want to ask to use your holiday entitlement and take the time off work instead. Either way, your holiday entitlement should be dealt with before/on your departure from the company.
If you are unsure about how much annual leave you are entitled to, please see our blog here – https://lincslaw.co.uk/blog/annual-leave-what-holiday-should-i-get-off-work/
Bonuses, Commission, and Expenses
Importantly, if you are dismissed by reason of redundancy, you should also receive any bonus, commission and/or expenses you are entitled to. What you will be entitled to will, of course, depend on your personal circumstances and your contract of employment.
Am I Entitled To A Redundancy Payment?
If you have been made redundant, you may also be entitled to a redundancy payment. You will generally be entitled to a redundancy payment if:
- You have been employed by the company continuously for two years or more; and
- You have been dismissed by reason of redundancy (for more information about redundancy, please see here – https://lincslaw.co.uk/blog/are-you-in-a-redundancy-situation/)
If you are entitled to a redundancy payment, as above, you will be entitled to at least a statutory redundancy payment. Importantly, however, you could be entitled to an enhanced redundancy payment. Please see below.
Statutory Redundancy Payment
A statutory redundancy payment is the minimum the law says you should receive. If you have at least two years’ continuous service with your employer and you were dismissed by reason of redundancy, you will automatically be entitled to (at least) a statutory redundancy payment.
A statutory redundancy payment is calculated on a formula based on an age multiplier, your gross weekly wage and your years’ service. Please see below.
Age Multiplier: This relates to how many weeks’ pay you should receive, depending on your age. Working backwards from the date of your dismissal, you are entitled to:
- Half a week’s pay for each year of complete service between the ages of 17 and 21.
- One week’s pay for each year of complete service between the age of 22 and 40.
- One and a half week’s pay for each year of complete service at 41 years old or over.
Gross Weekly Wage: Importantly, for dismissals on or after 6 April 2023, the maximum weekly pay is £643. This means if you are paid (gross) an average of say £800 per week, only £643 can be used in your statutory redundancy calculation. The maximum statutory redundancy payment you can receive is £19,290. However, please note, these figures change every year.
Years Service: Working back from the date of your dismissal, work out your number of years’ service. Importantly, only a full complete year count towards calculating your statutory redundancy payment. Importantly, this is capped at 20 years. This means, for example, if you have been employed at the company for 35 years, only 20 years can be used in your statutory redundancy calculation.
Enhanced Redundancy Payment
As above, it is important to check whether you are entitled to an enhanced redundancy payment. As the name suggests, this would be more than a statutory redundancy payment. This may be expressly detailed in a clause in your contract of employment, or in other documentation.
Alternatively, your entitlement to an enhanced redundancy payment could be implied into your contract of employment (i.e., unwritten, but nevertheless agreed) through custom or practice. For example, where it is well known your employer/the industry pay enhanced redundancy payments. In these circumstances, your employer may create an expectation for you to receive such payment.
Implied terms, however, are harder to rely on as they are not detailed in your contract of employment. Therefore, should you wish to rely on this reasoning to obtain an enhanced redundancy payment, we would advise you to seek legal advice as soon as possible.
Can My Employer Refuse to Pay My Redundancy Payment?
You will be entitled to a statutory redundancy payment if you meet the criteria, as above.
However, in limited circumstances, you may risk losing your entitlement to such payment. For example, if you are found to have unreasonably refused an offer of suitable alternative employment, you may waive your right to such payment. For more information about this, please see our blog here – https://lincslaw.co.uk/blog/redundancy-what-is-suitable-alternative-employment/.
If this is the case, we would suggest you seek legal advice as soon as possible. Here at Lincs Law Employment Solicitors, we would be delighted to help. Please contact us for a free no obligation initial consultation. Please use the contact form, engage in a web chat, email contactus@lincslaw.com or call us on 01522 440512 and we’ll be happy to help.
Lincs Law Employment Solicitors Can Help You
If you have been made redundant and you are unsure about what payments you are owed, we would be delighted to help. Please contact us for a free no obligation initial consultation. Please use the contact form, engage in a web chat, email contactus@lincslaw.com or call us on 01522 440512 and we’ll be happy to help.
If you consider you have unfairly been made redundant, you may also find our blog here helpful – https://lincslaw.co.uk/blog/can-you-claim-unfair-dismissal-if-you-have-been-made-redundant/
Kate Key
Specialist Employment Solicitor
Lincs Law Employment Solicitors
Tags: at risk of redundancy employment solicitor enhanced redundancy Holiday Pay Kate Key lincs law employment solicitors Notice Pay pilon redundancy redundancy unfair dismissal statutory redundancy pay Statutory Redundancy Payments suitable alternative employment unfair dismissal