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Who is Entitled to Statutory Redundancy Pay?

By: Paul Geraghty - Updated: 12 Jun 2017 | 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]
@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 being laid off from my job but am only being paid 2 weeks paid lieu notice & no redundancy pay. I have worked for the business for over 4 years but was not on the payroll until February 2017 when the business was taken over by another ltd company but have never had a contract during my total employment because previous to February 2017 I was classed as self employed. Am I entitled to anything ?
Ash - 12-Jun-17 @ 7:52 AM
Dizzydiane - Your Question:
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?

Our Response:
The terms of your wages and how they are calculated should be contained in your contract of employment. We can't say who is correct as we have no knowledge of the finer administrative workings of your employer. If you feel you are correct on this issue, and you have tried to resolve the matter informally, you may wish to raise the matter in writing and formally to your LEA, via a grievance please see link here.
RedundancyExpert - 17-May-17 @ 11:07 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
I have worked for a cleaning company for just short of three years .now my boss has asked me to consider going self employed/sub contract. But still work for same companyAm I entitaled to any severance pay/redundancy.
Chris - 20-Apr-17 @ 10:18 AM
Steve - Your Question:
I have worked for a company for 13years on a 40hour contract but for more or less 10years I've been on short time but in the mean time the company has taken new employees on whilst some departments are on full time and others even on overtime while I'm on short time work. Is this legal?

Our Response:
Are you still being paid your contracted wage? If you are on a permanent contract for 40 hours per week and have not agreed to reduce your hours and you are receiving less less pay as a result, then you may have a case to answer. I advise that you read your contract and give ACAS a call to see what your options are.
RedundancyExpert - 13-Apr-17 @ 12:57 PM
I have worked for a company for 13years on a 40hour contract but for more or less 10years I've been on short time but in the mean time the company has taken new employees on whilst some departments are on full time and others even on overtime while I'm on short time work. Is this legal?
Steve - 12-Apr-17 @ 9:32 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
my employer sold his business a fortnight ago and we we're told are jobs are safe. the new owner has just sold up and we've been told now we have no jobs.what are my rights
Alan - 3-Mar-17 @ 2:19 PM
@Erstwhile Freelancer - no, it will start from the time you became an official employee (not a freelancer). JK
Joy - 24-Jan-17 @ 2:51 PM
I have worked in a college of higher education for 18 years - always in the same role. For the first 10 years I was a freelancer but the role eventually became employed. If I am made redundant now, will the early freelance years be included in any redundancy payment package?
Erstwhile Freelancer - 24-Jan-17 @ 10:52 AM
I am currently working for a company and the director has set another business up almost 3 years ago of which there are 4 directors. His 3 sons (who also work for there father) and 1 daughter. The company has been trading in similar work to our company. If he declares his company as insolvent am I entitled to redundancy, and if he offers us ALTERNATIVE employment with the new company are we obliged to take it. ?
Daz - 23-Feb-16 @ 8:12 AM
The company I worked for and served as a director for went into liquidation in August 2015, The insolvency practitioner sold some of the business assets including the E-Commerce website and Customer list to a similar business 20 miles away. I together with the other director and 6 employees claimed redundancy and notice pay from the government scheme, but this has just been refused as they consider that the business has transferred under TUPE which it has not. The former MD has appealed to the Insolvency Service and the case was reviewed but the result was the same. Where do we go from here? Do we have a claim against the Insolvency Service or the business that bought the assets (who is adamant that it is nothing to do with them!). Any help appreciated.
SR2410 - 24-Oct-15 @ 11:10 AM
@pot - more information can be found via the gov.uk site; 'your rights if your employer is insolvent', link here. I hope this helps.
RedundancyExpert - 5-Aug-15 @ 11:25 AM
Im an employee and a director of a company that has gone into voluntary liquidation i have worked there for 26 years can i claim redundancy pay from the government any help would be very much appriciated. Thanks
pot - 2-Aug-15 @ 3:32 PM
When I was made redundant a month ago, my employers told me the business was insolvent and I could claim redundancy pay from the government. I put in a claim but it was rejected because the company was shown as still active.Now my former employers have sold the business to someone else. Can I still claim RP from my old employer, or should I apply to the new one? Is it legal for them to sell the business when they told their employees they were dissolving the company?Any advice appreciated.
Gloria - 23-Apr-15 @ 3:49 PM
I know 4 nurses working in a NursingHome as Bank Nurses. They have been in that position for the last 4-5 years. Following a decision by the Nursing Home to convert it into a Care Home all the Nurses including the Bank Nurses have been made redundant. Regular Nurses are getting Redundancy pay. My question is are the Bank Nurses eligible for any Redundancy pay?
Unni - 12-Feb-14 @ 12:40 PM
I workedpart time 2 days a week for an employer for the last 6 years - I have been made redundant due to gross misconduct - am I entitled to my notice period although I didn't have a contract?
Blue - 10-Oct-13 @ 10:59 AM
I have been made redundant by Marstons Brewery & although I could do all the roles of the job needed they have kept a non contract worker ( of which a job I can do ) instead of me. I have worked there for 20 years with no discipline record against me. Do I have any rights regarding appealing against this or are the company within there rights.
Sharon - 2-Oct-13 @ 5:25 PM
Non paid director of company for 7years but was paying of loan
shark - 23-Aug-13 @ 12:43 PM
I have been made redundunt.the firm I worked for took voluntary insolvancy. I have filled in the form and have been waiting 5weeks I had a letter of insolvency service redunduncy payments saying dont do anything we be intouch with you .Ino the firm has no monney will Iget my redunduncy money
Tim Brittain - 26-Apr-13 @ 6:09 PM
I have been a director of a company for twenty nine years after that was bought out and continued working as employee for the new company for four years and now company is closing what redundancy am I entitled to
Tommy - 19-Oct-12 @ 9:25 AM
Ive been with employer 1year and 7months am I entitled to any redundancy money?
katiee - 20-Aug-12 @ 12:55 PM
I have worked continously since 31 jan 2006 for a uk company abroad part timeam I entitled to any redundancy payment. the contract will cease on 31 march 2012
boss - 8-Feb-12 @ 10:42 PM
I have worked for scottish pwoer for almost five years under an agency called search and then brook street I have been told my contract will not be reniewd as of 31/12/2011 some staff have been given a redundancy package and some have not and the reason I have went on here is because I have not, My agency have stated that only certain staff have it in the contract and I have not is this legal surely this can't be allowed??
db1873 - 19-Dec-11 @ 1:33 PM
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