What is the Statutory Entitlement on Redundancy?

Basic statutory entitlement on redundancy is not that generous. What’s more, you don’t even get a statutory redundancy payment until you’ve been employed for two years. The statutory redundancy payment is a week’s pay to a maximum of (at the time of writing £290 before tax or £310 after 1st Feb 2007) x full years worked x 1.5 for years worked over the age of 41. There’s also a slight variation for years worked under the age of 21. For a ‘Ready Reckoner’ see the DTI website at http://www.dti.gov.uk/employment/employment-legislation/employment-guidance/page27698.html

On top of the statutory redundancy payment, employees are entitled to statutory notice. Once you’ve got three months service under your belt, you’re entitled to at least one week’s notice. Statutory entitlement to notice then accrues at the rate of one week for each full week worked to a maximum of twelve weeks. Contrary to what a lot of people think, there is no automatic right to receive a payment in lieu of notice.

Of course you may be entitled to receive more notice under your contract of employment. This is great if you’re being made redundant, but not so good if you’re leaving to take up a lucrative new job elsewhere. A lot of employers do make a payment in lieu of notice when making staff redundant, and if they do so, that payment can often be paid free of tax.

You may be somewhat unimpressed by your statutory entitlement on being made redundant. A lot of employers offer enhanced redundancy terms and if they do so, they’ll probably ask you to sign a compromise agreement.

See my firm website:
www.reculversolicitors.co.uk or
www.compromise-agreement.net