Being made redundant, understandably, puts pressure on you and your family. Here at Lincs Law Employment Solicitors, we often advise clients who have unfortunately been made redundant and are concerned about their financial situation. If you are in this situation, we are here to help. Please read on to find out more about the payments you should receive.
Please note, this blog focusses on what payments you should receive from your employer if you have been dismissed by reason of redundancy. If you are concerned about the fairness of your redundancy or would like assistance with an ongoing redundancy consultation process, please see here – https://lincslaw.co.uk/blog/can-you-claim-unfair-dismissal-if-you-have-been-made-redundant/ and https://lincslaw.co.uk/blog/employee-five-questions-to-ask-in-a-redundancy-consultation-meeting/
Alternatively, why not call us for a free enquiry on 01522 440512. Alternatively, you can fill out our online enquiry form or email us at contactus@lincslaw.com and we will contact you to discuss your matter.
What Should I Be Paid If I Have Been Made Redundant?
No matter how long you have been employed, you will be entitled to the following contractual payments:
- Notice Pay; and
- Payment of any accrued but untaken holiday; and
- Any outstanding bonuses, commission, or expenses.
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:
- Through the passage of time i.e., either working for your employer or being placed on Garden Leave throughout your notice period. You should be paid as usual during this period; or
- As a Payment In Lieu Of Notice (PILON). This is where your employment is ended immediately, and you are paid for 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 but untaken holiday.
Alternatively, if you are still working for your employer, you may be able to (or be asked 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.
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
If you are dismissed by reason of redundancy, you should also receive any bonus, commission and/or expenses you are entitled to. This will very much depend on your contract of employment and the terms of any bonus plan, for example. Some bonus schemes do not entitle you to receive payment if you leave your employment before a certain date.
Am I Entitled To A Redundancy Payment?
If you have been made redundant, in addition to the above, 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 at least two years; and
- You have been dismissed by reason of redundancy i.e., your dismissal was said to have been because of your employer ceasing to trade altogether; your workplace closing or moving; or there was a reduced need for employees to carry out a particular kind of work. For more information about the definition of redundancy, please see here – https://lincslaw.co.uk/blog/are-you-in-a-redundancy-situation/
Statutory Redundancy Payment or Enhanced Redundancy Payment?
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.
What Is A Statutory Redundancy Payment?
A statutory redundancy payment is the minimum the law says you should receive. This is calculated on a formula based on an age multiplier (0.5,1 or 1.5), your gross weekly wage (subject to a current cap of £700) and your full years’ service (capped at 20 years).
By way of an example –
Mr Smith is 35 years old. He has just been dismissed by reason of redundancy after 10 years loyal service with his company. Mr Smiths’ average gross weekly pay was £890. He is not entitled to an enhanced redundancy payment (as below).
Using the example above, Mr Smiths’ statutory redundancy payment would be calculated as:
1 (age multiplier) x £700 (current statutory cap on weekly wage) x 10 (full years’ service) = £7,000.
What Is An Enhanced Redundancy Payment?
You may be entitled to an enhanced redundancy payment, which 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 (such as any redundancy policy).
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. This may be the case where it is well known that your employer (or their industry) pay such enhancements, to the extent that your employer creates an expectation for you to receive such payment.
If you require help establishing your owed redundancy payment, we would be delighted to help. Please call us for a free enquiry on 01522 440512. Alternatively, you can fill out our online enquiry form or email us at contactus@lincslaw.com and we will contact you to discuss your matter.
Can My Employer Refuse to Pay My Redundancy Payment?
As above, you will be entitled to a statutory redundancy payment if you were employed by the company continuously for at least two years and were dismissed by reason of redundancy.
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. 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 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.
Kate Key
Specialist Employment Solicitor
Lincs Law Employment Solicitors
Tags: at risk of redundancy compulsory redundancy employment solicitor enhanced redundancy Holiday Pay how much is my redundancy worth Kate Key lincs law employment solicitors Notice Pay statutory redundancy pay Statutory Redundancy Payments suitable alternative employment