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Who is Entitled to Statutory Redundancy Pay?

By: Paul Geraghty - Updated: 21 May 2019 | comments*Discuss
 
Redundancy Statutory Redundancy Pay

Redundancy payments are the silver lining in the cloud. Statutory redundancy payments tend not to be very generous, but they’re certainly better than nothing. But who exactly is entitled to one?

Entitlement to Statutory Redundancy Pay

The basic rule about Statutory Redundancy Pay (SRP) is that you are entitled to it if you have worked for your employer continuously for more than two years before being made redundant. You need to have a contract of employment, but this does not have to be in written form. Virtually everyone who does work for anyone else establishes a de facto contract of employment by doing so.

If you have less than two years’ continuous service, unfortunately you will not be entitled to any Statutory Redundancy Pay at all, although your contract of employment may give you rights to non-Statutory Redundancy Pay.

Part-time workers are entitled to SRP just as full-time workers are. Short-term casual workers, however, are not. If you work for a company through an agency, for example, legally your employer is the agency, so you will not be entitled to anything if the company itself announces some redundancies.

Self-employed people and freelance workers are generally not entitled to Statutory Redundancy Pay. Similarly, directors of companies usually have no entitlement.

Workers on fixed-term contracts are entitled to SRP if the duration of the contract is two years or more and it is not renewed by reason of redundancy.

If you have been put on short-time working by your employer for four weeks in a row, or six weeks within a 13 week period, you are also entitled to redundancy pay.

When You Are Not Entitled to Statutory Redundancy Pay

If you are dismissed from your job, rather than made redundant from it, you are not entitled to statutory redundancy pay. If you resign from your job, whether in a normal way or because you feel that you have been constructively dismissed, you are not entitled to SRP either.Certain categories of worker are always excluded from the statutory entitlement to redundancy pay. Among others, this include apprentices and those who serve in the military.

If you leave the job from which you are being made redundant and start a new one during your notice period, you may lose your entitlement to SRP.

If your employer offers you a new job as an alternative to making you redundant, and you reject it without good reason, you may lose your entitlement to SRP. Your employer is entitled to refuse to pay your SRP if the new job is substantially equivalent to the old one. You may feel that, in some important respect, it was not equivalent. When there is a dispute about this, it would have to be aired at an Employment Tribunal. If you win there, your employer would be forced to pay you SRP.

When the Company You Work For Has Been Taken Over

In general, the Transfer of Undertakings Protection of Employment regulations (TUPE) ensures that when the company you work for is taken over by another, your contract of employment is automatically continued by the new proprietor. This means that if you worked a company for one year before it was taken over, and then worked for the new company for another year after that, you would be entitled to statutory redundancy pay because, from a legal perspective, you have completed two years of continuous work for the same employer.

If the company you worked for was taken over, and the new proprietor agreed to continue your employment as before, but, for some reason, you decided not to accept this, you would not be entitled to redundancy pay. Your decision would be considered a form of voluntary resignation.

Entitlement to Statutory Redundancy Pay – Conclusion

In this age of changing work patterns, it is not always clear at first glance who is entitled to Statutory Redundancy Pay. But in recent years the government has been hardening regulations somewhat to bring some formerly excluded categories of worker into the fold.

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[Add a Comment]
I was made redundant at jaguar Land Rover and found a new job (2 weeks) before my end date. I worked there for 2 years and 11 months. Can I claim redundancy as I only resigned to start a new job because I knew I was being made redundant?
Luke - 21-Feb-19 @ 12:26 PM
Can you please answer a question for me, If I move to part time work from full time work, will I be entitled to any redundancy pay? Thank You
Jock Mcnab - 30-Jan-19 @ 2:12 PM
Hi if you work for a small company for last 7yr but then it was sold on 4mth ago with all staf stil doing the same jobs and so on But then friday get a letter frpm new boss saying im being dismissd as there isnt much work and he wil pay me 1 weeks pay but its up to me if i goin to work it starting that same day can he do this Grateful for advice thanks
None - 19-Jan-19 @ 3:16 PM
I've been employed over 20years. My boss has told me he is retiring in next year and if no one wants to take over business he will wind it up. Does he need to pay out redundancy if business is wound up?
DonJock - 4-Dec-18 @ 11:57 PM
Hi, I have been working for the same company for 13 years and last month he said he has no work for me, he will let me know if anything comes up. I have now found out the company is closing in December I am self-employed and paid throu a third party ..but I do not supply tools vans boots anything ..I have only worked for this one company in the 13 years ..am I entitled to any redundancy ? ...he pays my tax to the 3rd party . Many thanks.
Kevin Harkins - 26-Nov-18 @ 12:47 PM
Hi Iv been made redundant And my boss has now put the business up for sale 6 weeks till we close down Iv decided to set up my own buinesss with my redundancy pay so have set the ball in motion for that But if he did sell in 6 weeks would I loose my redundancy pay? As it feels unfair that once you been told your been made redundant you then look at what to do next And 6 weeks is only a short time to sell a business
Bingo - 13-Aug-18 @ 8:05 PM
lost sheep - Your Question:
Hi, I've been working for my company (which is a partnership) for the last 25 years. The boss has told us he has looked into things and he doesnt have to pay redundancy (he says he is insolvent) we requested a reference number to claim of the government but he said he doesnt have one as its "not that type of insolvency"? He is closing the business as there is not enough coming in to keep it running, and he will not be moving premises elsewhere or trading under different name. I am really unsure on my rights here and im worried im going to lose my house if I cant keep the payments (which I was hoping to pay with my redundancy) Any help would be appreciated. Thankyou

Our Response:
The link here, will help you answer your question.
RedundancyExpert - 27-Jul-18 @ 12:33 PM
Hi, I've been working for my company (which is a partnership) for the last 25 years.The boss has told us he has looked into things and he doesnt have to pay redundancy(he says he is insolvent) we requested a reference number to claim of the government but he said he doesnthave one as its "not that type of insolvency"? He is closing the business as there is not enough coming in to keep it running, and he will not be moving premises elsewhere or trading under different name . I am really unsure on my rights here and im worried im going to lose my house if i cant keep the payments (which i was hoping to pay with my redundancy) Any help would be appreciated .... Thankyou
lost sheep - 26-Jul-18 @ 11:51 PM
Hello my wife has 20 years service as a cleaner for a cinema that is closing down she does Not work for the cinema but works for a cleaning company how does she stand about redundancy many thanks PJ
P J - 4-Jul-18 @ 6:13 PM
Lis - Your Question:
Hi, I am treasurer for an unincorporated charity, the charity is closing and a long serving employee is entitled to redundancy which the charity will not be able to pay. Can they claim from the government? Thanks

Our Response:
The link here may help you more.
RedundancyExpert - 28-Jun-18 @ 2:53 PM
Hi, i am treasurer for an unincorporated charity, the charity is closing and a long serving employee is entitled to redundancy which the charity will not be able to pay. Can they claim from the government? Thanks
Lis - 27-Jun-18 @ 7:51 PM
I have worked for the same company for 12 years in June .in September I had to move areas but continued to do my job ( as it was work from home anyway )yesterday my manager came to me and said they no longer need me and that they will give me 3 months then I am to be done with the company . This doesn't seem right . They won't say out loud i am sacked I suppose because I have done nothing to be sacked for . Nor have they offered me redundancy ... what do you think I am entitled to ? Thankyiu
Megj - 9-May-18 @ 2:26 PM
Hi I have be maded redundant. I have been with this company for 18 years and now this company is saying that they don’t pay out redundancy, they only pay out what the government says. Is this right.
D - 24-Apr-18 @ 5:47 AM
Polly - Your Question:
The company I currently work for are relocating and I have been offered employment by the company who are moving into the premises. Am I entitled to redundancy? I have been employed by the current company for nearly 12 years

Our Response:
You can see more via the gov.uk link here, which should help answer your question.
RedundancyExpert - 6-Mar-18 @ 2:35 PM
The company I currently work for are relocating and I have been offered employment by the company who are moving into the premises.Am I entitled to redundancy?I have been employed by the current company for nearly 12 years
Polly - 6-Mar-18 @ 10:24 AM
DJC - Your Question:
Hi, if employer is in liquidation and employee is transitioned to a new employer would employee still be entitled to statutory redundancy pay?

Our Response:
When a business changes owner, its employees may be protected under the Transfer of Undertakings (Protection of Employment) regulations (TUPE), please see link here , for more information on what this means.
RedundancyExpert - 13-Feb-18 @ 11:46 AM
Hi, if employer is in liquidation and employee is transitioned to a new employer would employee still be entitled to statutory redundancy pay?
DJC - 12-Feb-18 @ 5:12 PM
Company entered a CVAwhich failed a few months later All staff and the director received statutory redundancy payments but were refused payments for holiday pay and outstanding wages due Reason given was claims were deemed to be after the original date of the CVA
Plinky - 12-Oct-17 @ 10:51 PM
Old company went insolvent on Friday. New company started on the Monday. Employee been given job exactly the same in new company. Is he entitled to redundancy?
Sus - 5-Oct-17 @ 4:05 PM
Templer - Your Question:
HiI’ve work full time for the same company for 10 years. Then I reduced my hours to 20 for awhile but then I dropped down to 5 hours as I’m over 63 and wanted more time with family. Now the company I worked for has gone into administration. Am I entitled to redundancy? Lee

Our Response:
Please see gov.uk link here for more information on your situation and what your rights are.
RedundancyExpert - 5-Oct-17 @ 9:40 AM
Hi I’ve work full time for the same company for 10 years. Then I reduced my hours to 20 for awhile but then I dropped down to 5 hours as I’m over 63 and wanted more time with family. Now the company I worked for has gone into administration. Am I entitled to redundancy? Lee
Templer - 4-Oct-17 @ 1:10 AM
@carol - yes, if your job is being made redundant.
Jo - 22-Aug-17 @ 3:30 PM
I have just been told that i need to find another job till christmas because there is no work , boss gave me two weeks to find something witch i have got new job now , and i was wondering am i entitled to any redundancy pay, been with them for three years and three months , and i have made my mind up not to go back , any help will be great ,
MUSH - 20-Aug-17 @ 9:56 PM
Do you get redundancy pay if you have been off work for 11 months sick?
Carol - 15-Aug-17 @ 9:59 AM
I have just been made redundant last week, I have worked for the company since 2011 when I started my apprenticeship and only completed my apprenticeship in July of last year. Am I entitled to any redundancy or not?
Dan - 14-Aug-17 @ 2:09 PM
@Ash - Not if you have been previously classed as self-employed and have only recently been employed by the new owners.
Andy73 - 13-Jun-17 @ 9:57 AM
I am taking voluntary redundancy in august. I work 25 hrs as an administrative assistant in a school, I work 38 weeks a year and my salary is divided into 12 equal monthly amounts. I am classed as a term time worker. My redundancy package has been calculated as though I work 52 weeks so my pay works out as £213 pounds a week, I believe that my weekly pay should be around £253 pounds a week based on 44 weeks i.e. 38 weeks worked and 6 weeks holidays which I am expected to take in school holidays. My LEA disagrees who is correct?
Dizzydiane - 16-May-17 @ 4:04 PM
We're a very small charity and a colleague was made redundant a few months ago because we ran out of money for their project. We now want to re-employ them for a few months. Will they have to pay tax on their (small) redundancy payment?
Finance Officer - 6-Apr-17 @ 1:42 PM
I have been working in shell garage for about a year and it's been taken over by another retailer , my old employer offerd another job and later he changed his mind and wants me to go with new retailer , I don't wish to continue the job any more can I clime redundancy ?
Munna - 11-Mar-17 @ 3:34 PM
Being made redundant nxt wk and we have to apply for statutory redundancy online how long does this take to b paid into our bank.I used to get paid at end of month thank you
Me - 3-Mar-17 @ 3:37 PM
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