WORKPLACE ANSWER
Am I Entitled to Redundancy Pay?
This page explains what redundancy pay is, when it may apply and what factors can affect entitlement. It is written for UK employees in plain English to help you understand the situation before deciding what to do next.
Quick Answer
Not everyone who is made redundant will automatically be entitled to redundancy pay. Whether redundancy pay applies can depend on things like your employment status, how long you have worked for your employer, the reason your employment is ending and the circumstances of the redundancy.
Understanding whether you may qualify for redundancy pay is usually the first step before worrying about how much you might receive. This page explains the main points to think about so you can ask informed questions about your own situation.
What This Usually Means
Redundancy pay is usually money paid to some employees when their job is genuinely made redundant. In many cases, entitlement depends on having worked for the same employer for a minimum period and meeting certain rules about how and why employment is ending. Some employers also offer their own contractual redundancy pay, which can be more generous than any minimum entitlement.
Why This Happens
Redundancy pay exists to provide some financial support when a job ends because of redundancy. In some situations it is intended to:
• recognise long service in certain circumstances
• help employees financially while they look for new work
• provide a clearer framework for what happens when roles are removed
Eligibility rules exist because not every situation is the same. Different employees may have different entitlements depending on their length of service, their employment status, the reason their job is ending and what their contract says. This can mean that two people in the same workplace do not always receive the same redundancy pay.
Things To Think About
Before assuming you are or are not entitled to redundancy pay, it can help to think through a few key questions about your own situation.
- How long have you worked for your employer?
Check when you started working for your employer and whether there have been any breaks in your employment.
Are you an employee?
Redundancy rights usually apply to employees rather than all types of workers. If you are unsure about your employment status, you may want to check your contract.
Why is your employment ending?
Redundancy is usually about your role no longer being needed, rather than issues like performance.
What does your contract say?
Some employers provide contractual redundancy pay that is more generous.
Have you received written information?
Read any letters given about your redundancy carefully and make a note of notes you would like explained.
What Happens Next
If redundancy is confirmed, your employer will normally explain what happens next. This will often include:
• whether redundancy pay applies in your situation
• how any redundancy pay has been calculated
• when payment is expected
• any notice period
• any appeal process that may be available
If you are unsure about how your redundancy pay has been worked out, it is usually reasonable to ask your employer to explain the calculation before assuming there has been a mistake. Having your own notes about your start date, salary and any relevant contract terms can help you follow the explanation.
Frequently Asked Questions
What is redundancy pay?
Redundancy pay is money that may be paid to some employees when their job is genuinely made redundant. It is usually intended to provide some financial support after redundancy and may be based on factors such as length of service, age and weekly pay, depending on the rules that apply.
Who qualifies for redundancy pay?
Entitlement to redundancy pay can depend on several factors, including your employment status, how long you have worked for your employer and the reason your employment is ending. Not everyone will qualify, and the rules can vary depending on your circumstances and any contractual arrangements.
How is redundancy pay calculated?
Redundancy pay is often calculated using a formula that takes into account your length of continuous service, your weekly pay (up to any relevant limits) and, in some cases, your age. Some employers use the minimum legal formula, while others offer their own contractual schemes. You should be told how any payment has been worked out.
Related WorkAnswers
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Can I Appeal My Redundancy?
What Happens After I Am Made Redundant?
I Think My Employer Has Not Followed the Rules
Important: WorkAnswers provides general workplace information, not legal advice. Entitlement to redundancy pay can depend on your individual circumstances, your employment contract and your employer’s policies.
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