Home > Law > Who is Entitled to Statutory Redundancy Pay?

Who is Entitled to Statutory Redundancy Pay?

By: Paul Geraghty - Updated: 17 Mar 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 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
@carol - yes, if your job is being made redundant.
Jo - 22-Aug-17 @ 3:30 PM
MUSH - Your Question:
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 ,

Our Response:
Much depends upon the type of contract you are working under. For instance, if you have a zero hours contract your employer is not obligated to give you work. I suggest you read your employment contract to see whether you are entitled to any redundancy payment i.e if you are on a fixed term permanent contract you will be.
RedundancyExpert - 21-Aug-17 @ 2:40 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 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
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