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Redundancy pay – some surprising answers

The right to redundancy pay is one of the longest-established statutory employment rights. It was brought in by the Redundancy Payments Act 1965. The earlier payments would have been made in pounds, shillings and pence! However, even after all this time there are still some surprising answers to particular questions.

For example, what happens when an employee works full time for many years, changes to part time (perhaps on return from maternity leave) and is made redundant soon after? (Hopefully not due to taking maternity leave, or becoming part time!) Is the redundancy pay based on the years of full-time service or the recent move to part-time work?

Unfortunately for the employee in this case, the statutory redundancy pay is based on current earnings. Although the length of service is, of course, taken into account no credit is given for the fact that much of that service was full time. Note that this also works the other way round and employees who have recently increased their hours or had a pay rise will benefit.

Many employers assume that if they make an employee redundant and that employee leaves without working the full notice then he or she forfeits the right to redundancy pay. In fact it is not as simple as that. Employers need to serve written notice on departing employees requiring them to withdraw their notice if they wish to withhold statutory redundancy pay. Even then the employee can still challenge this in an employment tribunal. The tribunal may decide that the employee should receive the payment after all depending on the circumstances.

See longer answers to these questions in FAQs on the Xperthr website:

Where an employee has recently changed from full-time to part-time hours how should his or her redundancy payment be calculated?

Where an employee has been given notice of redundancy, if he or she seeks to leave before the end of the notice period to take up a new job will this affect his or her statutory redundancy payment?

See FAQs on Redundancy Rights on the XpertHR website for answers to more than 30 questions about redundancy.

Read other FAQs on the site.

See also Top 10 employment law myths


Clio Springer | |

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