How is redundancy pay calculated under the Employment Rights Act 1996?
Where an employee has recently changed from full-time to part-time hours how should his or her redundancy payment be calculated?
Will an employer be liable to an age discrimination claim if it makes enhanced redundancy payments?
Where an employee on maternity leave who is receiving statutory maternity pay is being made redundant should her redundancy pay be calculated on her normal rate of pay or her maternity pay?
If an employee who qualifies for additional paternity pay is dismissed as redundant should he be paid his full additional paternity pay entitlement?
Is an employee who is accepted for voluntary redundancy entitled to a statutory redundancy payment?
Should regular overtime be taken into account when calculating weekly earnings for redundancy pay purposes?
Where an employer wishes to make a full-time position part time due to a reduction in work would this situation come under the definition of redundancy?
Do employers have to pay redundancy payments to part-time employees?
Section 135 of the Employment Rights Act 1996
entitles an employee to receive a statutory redundancy payment if he or she is
dismissed by the employer by reason of redundancy and meets the relevant
qualifying conditions. A redundancy payment is based on "a week's pay" (subject to the statutory cap) and takes
into account the employee's age and the number of years of employment. Years of
employment count equally for this purpose regardless of whether the employee
worked full time or part time. To calculate a redundancy payment, the employer
must first determine the period, ending with the relevant date (ie the date on
which the notice of redundancy expires or the date on which the termination of
employment takes effect if no notice is given), during which the employee has
been continuously employed. It must then work backwards from the end of that
period to calculate the number of complete years of employment falling within
that period. Finally, the employer must allow the appropriate amount for each of
those years of employment. The
appropriate amounts are: one and a half weeks' 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
Sections 221 to 224 then set out how to calculate "a week's pay".
This is somewhat complicated and depends on whether the employee has normal
working hours or not. It is assumed here that the employee does have normal
If the employee's normal working hours are the same every week
and his or her wages for employment in normal working hours do not vary with
the amount of work done, the amount of a week's pay is the amount that is
payable by the employer under the contract of employment in force on the
calculation date if the employee works throughout his or her normal hours in a
If the employee's wages do vary with the amount of work done
but the number of normal working hours does not vary, the amount of a week's
pay is the amount of pay for the number of normal working hours in a week calculated
at the average hourly rate of pay payable in respect of a 12-week period ending
with the last complete week before the calculation date (or, where the
calculation date is the last day of a week, with that week).
Where the employee is required under the contract of employment
to work during normal working hours on days of the week or at times of the day
that differ from week to week or over a longer period (so that pay varies from
week to week), the amount of a week's pay is based on the average pay and the
average number of hours worked in the last 12 weeks before the calculation
Therefore, if the employee's change to part-time hours was a
permanent contractual change and his or her normal working hours are now the
part-time hours, the whole redundancy payment will normally be calculated based
on the reduced part-time salary.
Is an employer required to consult with employees prior to giving notice of redundancies?
Should an employer delay notifying employees of potential redundancies if one or more of the affected employees are on short-term sick leave?
With regard to redundancies what obligation to notify BIS does an employer have?
When should the employer begin collective redundancy consultation with employees?
What should redundancy consultation be about?
What information must the employer disclose prior to redundancy consultations?
What should the employer and employee discuss at an individual redundancy consultation meeting?
Who should be consulted about employee redundancies?
If employee representatives are elected to consult on redundancies, how should those elections be conducted?
What is the time frame for electing employee representatives for collective redundancy consultation purposes?
How many employee representatives are necessary for collective redundancy consultation purposes?
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