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How Much Statutory Redundancy Pay Will I Get?

By: Paul Geraghty - Updated: 6 Jul 2018 | comments*Discuss
Redundancy Statutory Redundancy Pay

Employees with more than two years of continuous service should receive a lump sum payment from their employer when they are made redundant. Your employer should provide you with a written statement, setting out how the calculation of your Statutory Redundancy Pay was made. But of course you should check it yourself.

There are three basic components which go into the calculation of Statutory Redundancy Pay : your weekly pay, your years of continuous service, and your age.

Statutory Redundancy Pay – Continuous Service

This is normally calculated from the beginning of your employment to the date on which your notice period should end. Some forms of extended absence, for example those relating to pregnancy or sickness, still count as part of your “continuous service”. Note that time spent on strike, however, does not.

Statutory Redundancy Pay – Weekly Pay

For the purposes of this calculation, your weekly pay is calculated as follows. If your weekly pay is a standard amount, that is the value used.

If your normal working hours are fixed but you sometimes work extra hours, your average hourly pay during the 12 preceding weeks is calculated and multiplied by your normal working hours.

If your working hours are not fixed and your pay is highly variable as a result, your average weekly pay for the previous 12 weeks is used.Note, that for the purposes of calculating Statutory Redundancy Pay, there is an upper limit on the weekly pay figure which is used. At the moment, the upper limit is £330, although you should check with the Department of Work and Pensions (DWP) to get the latest figure.

How Your Age Affects the Amount of Statutory Redundancy Pay You Will Get

The government believes that the experience of redundancy is less disruptive to the lives of young people than to older workers. Young people tend to find it easier to get new jobs quickly at approximately the same salary as before. Because of age discrimination in the workplace, this is more difficult for older workers.

The amount of statutory redundancy pay you will receive is affected by your age during the time you were working for your employer.

  • For each year of continuous service in which you were less than 22, you will get half of your basic weekly pay.
  • For each year of continuous service in which you were between 22 and 40, you will get your standard weekly pay.
  • For each year of continuous service in which you were over 41, you will get 1.5 times your standard weekly pay.

The maximum number of years which can be taken into account for the purpose of calculating Statutory Redundancy Pay is 20. From the two maximums of weekly pay and number of years, it follows that the maximum amount of Statutory Redundancy Pay can be calculated. Currently, this stands at around £10,000, although legislative changes and updates to the figures to take account of inflation means that this can change from year to year.

Statutory Redundancy Pay Entitlement – Conclusion

Always check your Statutory Redundancy Pay to make sure the company has given you the right amount. You can either do it yourself manually using the information presented above or use some of the online ready forms which are available.

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My company I work forhas been paying team leaders ' cover pay' for over 8 years. Cover pay is paid 45 minutes extra at the rate of time and half. Every week a team leader will get paid average 2-4 cover pays per week. Basically in the absence of line manager, team leader comes early to run the section on his own. The company has asked team leaders to come 45 minutes early, to get handover from previous shift, than they go to the meeting, before the shift starts to meet with the operation manager who conducts the brief. Average a team leader gets paid £30.00 per week 'cover pay.' All the colleagues have been made redundant by the company. The company are refusing to add this additional pay to team leaders on their redundancy package. Can you tell me if Team Leaders are in title to this pay to be added on the redundancy package ? Company now is saying we didn't ask you to come. The company allowed this payment for 8 - 15 years. It is regular payment and the team leaders are all of understanding that this should be added and has become contractual pay as has been paid for so long and it is part of team leaders role/ job. Team leader's are only contracted for 40 hours per week . 'Cover pay' is not clased by the company as overtime, and it is been paid as cover pay. Please, can someone give us advice. There is case in 2013 Park Cakes Ltd v Shumba and others. Is there any similarities.
valter - 6-Jul-18 @ 5:17 PM
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