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The Employment Rights Act 1996 sets out how a redundancy payment is calculated by determining the period, ending with the date of termination of employment, during which the employee has been continuously employed. It then works backwards from the end of that period to calculate the number of complete years of employment falling within that period. Finally, it allows the appropriate amount for each of those years of employment. The appropriate amounts are: one and a half weeks' pay (subject to the statutory cap on a week's pay) for each year of employment in which the employee was aged 41 or over; one week's pay for each year of employment in which the employee was aged between 22 and 40; and half a week's pay for each year of employment in which the employee was aged 21 and under.
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