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Who is Entitled to Statutory Redundancy Pay?

By: Paul Geraghty - Updated: 18 Jul 2018 | 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 am contracted bank with the company I work for and may be made redundant after 13years working for them. My contract is not 0 hours but 3 shifts a year. Am I entitled to any redundancy pay.i work roughly 10 shifts a month.
H - 18-Jul-18 @ 1:20 AM
@P J - it depends what type of contract your wife is on and how long she has been with the cleaning company. So, she would not get any redundancy from the cinema. If her cleaning company employer has to make her redundant as a result, then she may have rights to be awarded redundancy.
Lou - 6-Jul-18 @ 2:09 PM
Woo hoo - Your Question:
I have been working for a company as self employed for nearly two years in October 2018. I am covering maternity leave for someone. I have no contract. But this company was taken over in may this year. Am I entitled to anything if they decide to terminate my contract after October 2018.

Our Response:
You would not be entitled to anything because of your self-employed status and because you pay your own tax and NI.
RedundancyExpert - 6-Jul-18 @ 1:44 PM
I have been working for a company as self employed for nearly two years in October 2018. I am covering maternity leave for someone . I have no contract . But this company was taken over in may this year . Am I entitled to anything if they decide to terminate my contract after October 2018.
Woo hoo - 4-Jul-18 @ 8:20 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
lgrewcock - Your Question:
Hi, my wife works for a franchise of a major company and has done so for over 10 years. The business is closing and all responsibilities will transfer to another franchise. The closing business claim that employees can transfer to the new franchise under TUPE but the receiving franchise insist this is not TUPE. My wife, who is currently on maternity leave, has been offered a job at the new franchise but only under a new contract and only when she decides to return to work. So not a TUPE transfer and they will not take on her statutory maternity pay. Her current employer claims that this is not a redundancy situation and insists that she must resign from her current role if she wants them to continue paying her maternity pay.We would like to know whether she is entitled to redundancy and whether she does actually need to resign from her role in order to continue receiving her maternity pay.

Our Response:
In this case, your wife would need to run this by Acas due to the complex nature of what her employer is requesting of her.
RedundancyExpert - 19-Jun-18 @ 11:04 AM
Hi, my wife works for a franchise of a major company and has done so for over 10 years. The business is closing and all responsibilities will transfer to another franchise. The closing business claim that employees can transfer to the new franchise under TUPE but the receiving franchise insist this is not TUPE. My wife, who is currently on maternity leave, has been offered a job at the new franchise but only under a new contract and only when she decides to return to work. So not a TUPE transfer and they will not take on her statutory maternity pay. Her current employer claims that this is not a redundancy situation and insists that she must resign from her current role if she wants them to continue paying her maternity pay. We would like to know whether she is entitled to redundancy and whether she does actually need to resign from her role in order to continue receiving her maternity pay.
lgrewcock - 18-Jun-18 @ 2:39 PM
cher01 - Your Question:
HiI run a small wedding stationery business which is limited but unfortunately I have seen a massive drop in sales over the last two years. I have had a lady on my books whom has worked for me for a period of nearly 10 years on an ad-hoc basis. There is no written contract in place and she basically works from home as and when needed. Some months she will not earn anything as there has been no work for her. She has another part-time job. I haven't been able to give her any work over the last four months as there has barely been enough to keep me busy so she has suggested to me to make her redundant so that she can get a better tax code to give to her other employer.My question is, as I want to make sure this is done correctly & fair, is this lady entitled to redundancy pay as my accountant says she is only classed as a casual worker and she is the one that has suggested I make her redundant as I have no work for her. Any advice would be greatly appreciated.

Our Response:
Do you pay tax and NI on her behalf? It's a tricky situation when there is no contract involved. An employer may think that having no contract leaves them in a more casual position, but not so. Even though a contract may not be in place, there are 'implied terms' by the fact she works for you on a regular basis and does not turn down work. If a ‘mutuality of obligation’ has developed she could have become an employee. On the other hand, if she has only worked for you occasionally on a very loose basis, it seems unlikely she will be an employee and you wouldn't have to pay redundancy. In this case, you may wish to give Acas a call to better establish this.
RedundancyExpert - 15-May-18 @ 10:41 AM
SG34 - Your Question:
I have worked on average 40 hours a week for the last 7 years I have never had a pay rise and am on a zero hours contract am I entitled to any redundancy please

Our Response:
If your employer is making redundancies currently, then you would be if you are picked. You would not be entitled for redundancy if your employer is not. If you wish for a pay rise, then you should ask your employer directly.
RedundancyExpert - 14-May-18 @ 11:17 AM
Hi I run a small wedding stationery business which is limited but unfortunately I have seen a massive drop in sales over the last two years.I have had a lady on my books whom has worked for me for a period of nearly 10 years on an ad-hoc basis.There is no written contract in place and she basically works from home as and when needed. Some months she will not earn anything as there has been no work for her. She has another part-time job.I haven't been able to give her any work over the last four months as there has barely been enough to keep me busy so she has suggested to me to make her redundant so that she can get a better tax code to give to her other employer. My question is, as I want to make sure this is done correctly & fair, is this lady entitled to redundancy pay as my accountant says she is only classed as a casual worker and she is the one that has suggested I make her redundant as I have no work for her.Any advice would be greatly appreciated.
cher01 - 14-May-18 @ 10:44 AM
I have worked on average 40 hours a week for the last 7 yearsi have never had a pay rise and am on a zero hours contract am I entitled to any redundancy please
SG34 - 13-May-18 @ 12:49 PM
Megj - Your Question:
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

Our Response:
Much depends upon your contract and what kind of contract you have (i.e self-employed). If your contract is PAYE, then in this instance you may wish to check if your dismissal is fair, please see link here . If you have read the terms of your contract and you do not think your dismissal is fair, then you are advised to speak to Acas to find out more.
RedundancyExpert - 10-May-18 @ 9:58 AM
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
D - Your Question:
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.

Our Response:
There are two types of redundancy pay you could get:‘statutory’ redundancy pay - what the law says you’re entitled to or, ‘contractual’ redundancy pay - extra money your contract says you can get on top of the statutory amount. If you're entitled to either type of redundancy pay, it'll be paid by your employer, please see CAB link here .
RedundancyExpert - 24-Apr-18 @ 2:55 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
I have been contracting in the same company for 9 years, I have used limited company and umbrella companies to get paid over the years, could I get redundancy from my employer?
MrX - 17-Mar-18 @ 11:50 PM
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
I have worked for my employer for6 years now with the last 3 years working an average of 30 hours each week, I have a 0 hrs contract, am I entitled to redundancy? Thanks
Todd - 25-Jan-18 @ 8:32 PM
I have worked for a company full time for the past 5 years and reviewed a letter saying I'm getting made redundant but there only paying me 2 years redundancy which I don't think is fair I never had a written contract but can prove from bank statement I've been in continuous work for 5 years am I entitled to redundancy
Macca - 6-Nov-17 @ 9:40 PM
Mazza - Your Question:
Hi , I’ve worked a coffee shop for nearly 4 yrs now and as of 31st Dec 2017 they are shutting the business. I’ve never had a written contract , would I be entitled to redundancy pay ???

Our Response:
If your employer has paid tax and NI on your behalf and is closing because of insolvency, you may be able to claim. Please see link here. If your employer is closing down the business because it no longer wishes to trade, then depending on how many employees are in the business and how long you they have been employed for, your employer will have to make statutory redundancy payments. In this case, your employer would have to inform employees individually - and follow a fair redundancy procedure, please see link here.
RedundancyExpert - 31-Oct-17 @ 2:13 PM
Hi , I’ve worked a coffee shop for nearly 4 yrs now and as of 31st Dec 2017 they are shutting the business . I’ve never had a written contract , would I be entitled to redundancy pay ???
Mazza - 27-Oct-17 @ 12:08 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
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