Page 1 of Redundancy Pay

Is there a level of pay that you have to receive, i think it is 1 months pay for every year you have been there, can anybody help with what you are entitled to by law?

Redundancy pay is calculated by taking the employee’s age, years of service and average weekly pay to arrive at a figure. However, the weekly pay is limited to a maximum of £250 per week and the maximum years that will be considered is 20. The years of service element also depends upon the age of the employee.

In detail:

Years of service between 18, but below 22 years of age, the employee`s weekly pay is multiplied by 0.5

Years of service between 22 and 41, the employee`s weekly pay is multiplied by 1

Years of service from 41 onwards, the employee`s weekly pay is multiplied by 1.5

Therefore the absolute maximum that can be awarded is: 20 years at £250 x 1.5 = £7,500

Redundancy pay is not payable to employees aged 65, or over the normal retirement age for their particular organisation. From 64 to 65 the award is reduced 1/12th for every month up to 65 when it becomes nil.

The employee must have two years` continuous service to qualify for this redundancy payment. However, if the employee has less than two years continuous service an Employment Tribunal has the discretion in certain circumstances to extend their period of service to two years so that they can therefore they can subsequently qualify for redundancy pay.

Contracts

Employees may have redundancy terms stated in their contracts or the employer may already have an agreed redundancy procedure. These will usually be more generous than the minimum stated by law. The only problem with these is that the employer may want to exclude employees from these schemes to lower the cost of redundancy - especially if the employer has to make a large amount of people redundant.

For more information do a search for Redundancy Pay through Google.

HTH

Choagy :-)

Hello!

There is an online calculator at http://www.dti.gov.uk/er/redundancy/ready.htm

Hope it helps.

James Q

This item was edited on Saturday, 28th June 2003, 10:15

Bl**dy Hell how wrong was I, you work in one place for ages earning them money and what do you get it return? F**k all! What a rip off. I now hate my job even more.

the government are a bunch of robbing c***s!!!

floyd
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Bring `em on, I`d prefer a straight fight

That`s minimum redundancy pay... I was made redundant a few years ago, and I got 1 months pay for every year of service on top of the government minimum amount. I suppose it depends who you work for.

I think I`m right in saying that redundancy pay is tax-free!!

shawn - yes it does vary from who you work for - it`s all should be in the companys T&C`s.

A company I used to work for bought out another, our T&C`s redundancy averaged about 2 weeks per year plus the goverment part, but the staff from the other company were on 5 weeks per year plus goverment part - you can guess who was wanting to take VR. some were coming out with 80K.

goodfeela - only the first 30K is tax free.