Statutory redundancy payments are calculated based on a formula which uses length of service (capped at 20 years), age and weekly pay (currently capped at £538). Employees need a minimum of two years’ continuous employment to be entitled. There is a useful Government calculator for working out redundancy payments, which can be accessed here:
Some employers also operate ‘enhanced’ redundancy schemes, where employees’ redundancy payments are calculated using a more generous formula.
Employees who are being made redundant are also entitled to be given notice in accordance with their contract of employment (or statutory minimum notice, whichever is higher). An employee can be required to work during this notice period as usual, although they have the right to a reasonable amount of paid time off to look for alternative employment (for example to attend job interviews). In practice, some employers prefer to make a payment in lieu of notice in these circumstances in line with the employee’s contract of employment.
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