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Statutory Redundancy Payments

Statutory Redundancy Payments

- by Becky Hall
Lost Your Job? What Can You Do?– Chapter Seven

Have you lost your job and wondering if their is any payment help available? You have come to the right place. Cashfloat explains in ‘Lost your Job’ guide all about the Statutory Redundancy Payments.

Losing your job? Cashfloat advises you of what your Statutory Redundancy Payments Are.

If you are made redundant, your employer by law must pay Statutory Redundancy Payments. This is a minimum amount that your employer will give you as a financial safety net. This should prevent you from taking out unsecured short term loans and falling into debt. Discover how much your statutory redundancy pay is with Cashfloat’s guide to job loss.

The Redundancy Payments Act

Before the Redundancy Payments Act of 1965, people who lost their jobs did not receive any statutory severance pay. The government introduced the Act as a safety net. After a qualifying period at work, but lost your job through no fault of your own, you would have a right to payment. The law designed it to help people pay for everyday expenses without taking out no guarantor payday loans.

The act makes it a regulation for employers to provide ex-employees with a minimum amount of money to survive unemployment. It allows the employee to have a financial safety net to fall back if they didn’t find work straight away. Additionally, it would make employers think more carefully before making workers redundant.

Statutory Redundancy Payments - cashfloat

There are three parts of employment law that forms the pillar of worker’s rights in the UK. They are: The Contracts Of Employments Act; The Industrial Relations Act; The Redundancy Payments Act

Payment As Compensation For Redundancy

If your employer advises you that your job is disappearing for one reason or another, it entitled you to some compensation. Provided that you have worked in the company for a minimum of two years, you can receive this compensation.

Statutory Redundancy Pay is the amount that is set down by law. You cannot receive payments less than the set amount. They are subject to change when the government introduces the annual financial budget. If you are working for a company as a contractor or a self-employed worker, then no statutory redundancy pay is applicable.

Agency Employees And The Self-Employed

Most people who work for legitimate companies class as employees. However, there are some exceptions. Short term casual workers, self-employed, and agency workers regarding redundancy payments often also class as employees.

However, an agency worker who is on a fixed term contract that is running for more than two years may class as an employee.

Statutory Redundancy Payments - cashfloat

Additonally, if the agency worker has continuous operating contracts, totalling up to more than two years, may also be considered for redundancy pay.

Certain occupations such as police officers and civil servants do not get statutory redundancy payments. But, they will get contractual redundancy pay. A check of the contract of employment will advise you about your rights to these payments.

Can Statutory Redundancy Pay Be Lost?

In some circumstances, you may not be entitled to statutory redundancy payments. Any employer who offers an alternative job that is suitable to your skills may lawfully retract statutory redundancy pay. This is if you refuse the job offer.

If you find a replacement job before your period of notice expires, it is possible to lose the statutory amount. However, in some cases, you still receive it.

There Are Set Amounts Of Statutory Redundancy Payments

Depending on your age, length of service and how much you earn, the amounts of statutory redundancy pay are set at certain levels.

An employee below the age of 22 is entitled to half a week’s pay for each complete year of employment. Employees aged 22 to 40 will get a full week’s pay for each year of service.

Statutory Redundancy Payments - cashfloat

Those over the age of 41 will receive a week and half of pay for each year that they have worked at the company. However, the government cap statutory redundancy pay at 20 years of service. There is also a weekly payment limit. This stipend currently stands at £479 per week. The figures use gross pay, not net pay.

Years Of Service

The payment counts your employment years of service up to the date that the notice of redundancy runs out. If you don’t get notice, then it is up to the date that it would have run out had it been issued. Some people are entitled to payment instead of notice as well as statutory redundancy pay.

Full Time And Part Time Employees

Unfortunately, if you changed from full time to part time working hours before becoming redundant, then you receive the statutory amount for part time hours. Payments are calculated by what you earned at the time of redundancy.

Commission, Bonuses And Overtime Payments

If your work hours varied each week or month, then your payment will be based upon an average weekly pay. This payment will include commission payments or bonuses.

Statutory Redundancy Payments - cashfloat

However, it does not include some commission payments. It does include commission payments that use a definite factor, i.e. the number of letters that you write each week.

Payments do not include a commission based upon how successful you are at your job. For example, the number of insurance policies that you sell. The amount of commission due is worked out as an average over the 12 weeks before you got notice of redundancy.

Unless your contract of employment includes overtime, it does not form part of the calculation for statutory redundancy payments.

Income Tax And Redundancy Payments

Statutory Redundancy payments do not attract the deduction of Income Tax. However, if the amount is over £30,000, there may be some tax to pay.

You do not need to claim Statutory Redundancy Payments. They are a right. Your employer is responsible for making the payment on the day you leave your job or very shortly after that. You are also entitled to a written statement confirming the amount and the method of calculation.

If An Employer Refuses To Pay Statutory Redundancy Payments

You can challenge failure by an employer, for any reason, to make a statutory redundancy payment.

Statutory Redundancy Payments - cashfloat

First, ask your employer for a written statement about why they have not paid you. You must ask for this within six months of leaving.

If there is still no response to your request, then you can go to an Employment Tribunal and make a claim. The time limit for making a claim is three months from your dismissal. This applies whether you consider yourself unfairly dismissed or wish to claim discrimination.

The Redundancy Payments Act has been instrumental in preventing employers from hiring and firing employees at will. However, following the implementation of Brexit, employments laws that are mandatory for European Union countries could change.

Hopefully, the new circumstances will not be to the detriment of employees in the UK. We need these rights to help protect their future.

Summary: Statutory Redundancy Pay UK

In this section of the guide to jobloss, Cashfloat, providing cash loans UK, talks you through the employment rights for statutory redundancy payments. We explained the purpose for them, how long they last and if it is possible to lose them. Additionally, we looked at the amount you will receive based on your average weekly wage. Finally, Cashfloat discusses the effect of the income tax and the responsibilty of your ex – employer to provide this right.

Statutory Redundancy Payments - cashfloat
Born a writer, Becky Hall figured she would use her talents productively. So, she became a content writer for Cashfloat, and she loves it. A Business and Accounting graduate, Becky scored high, graduating with a first, but also acquired a professional bookkeeping certificate in addition to her main studies. She always dreamed of becoming an accountant, something she still may achieve, but in the meantime, she is helping to break open a new industry of honest and ethical lending. Becky spends her spare time at the piano, with classical music her favourite choice, but will play jazz to keep her baby happy. Nowadays, though, she doesn’t always have much time; Cashfloat has a revolution to make.
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