Redundancy: Your Rights

Facing redundancy can feel daunting and unsettling. However, employment law provides clear protections to ensure you are treated fairly, consulted properly, and compensated if your role is made redundant. Knowing your statutory rights helps you navigate the process with confidence.

When Is Redundancy Genuine?

A genuine redundancy occurs when a business closes, a workplace shuts down, or the requirement for employees to perform work of a particular kind reduces. Redundancy must be based on the role being eliminated, not on personal feelings or performance issues.

Statutory Redundancy Pay Eligibility and Calculations

To qualify for statutory redundancy pay, you must be an employee with at least 2 years of continuous service with your employer.

Statutory redundancy pay is calculated using a formula based on your age, length of service (capped at 20 years), and weekly pay:

• Under age 22: Half a week's pay for each full year of service
• Age 22 to 40: One week's pay for each full year of service
• Age 41 and over: One and a half weeks' pay for each full year of service

Financial Statutory Limits:

• Weekly pay cap: £751 per week
• Maximum statutory redundancy pay total: £22,530
• Statutory redundancy pay up to £30,000 is tax-free.

Selection and Consultation Rights

Employers must use fair, objective selection criteria when choosing who to make redundant. Common criteria include skills, qualification levels, or attendance records. Selection must not be discriminatory or based on protected characteristics, pregnancy, trade union activity, or whistleblowing.

Your employer is legally required to consult with you individually before making a final decision. If 20 or more redundancies are planned at one establishment within 90 days, collective consultation must also take place (at least 30 days before the first dismissal for 20-99 staff, or 45 days for 100+ staff).

Notice Periods and Time Off

You are entitled to a statutory notice period or pay in lieu of notice. Employers should also consider offering suitable alternative employment within the business if positions exist. If you accept an alternative role, you have a statutory right to a 4-week trial period.

If you have 2 years of continuous service, you are also entitled to reasonable paid time off during your notice period to look for a new job or arrange training.

For detailed calculations and guidance, visit GOV.UK's redundancy rights guide or consult Citizens Advice redundancy guide.