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redundancy payment


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The sum that an employee dismissed because of redundancy is entitled to receive from his or her employer under the Employment Rights Act 1996. The sum is the total of:(1) one and a half weeks’ pay for each year of the employee’s continuous employment in which he was aged 41 or more;(2) one week’s pay for each year’s service between the ages of 22 and 41; and(3) half a week’s pay for each year below the age of 22.

(1) one and a half weeks’ pay for each year of the employee’s continuous employment in which he was aged 41 or more;

(2) one week’s pay for each year’s service between the ages of 22 and 41; and

(3) half a week’s pay for each year below the age of 22.

The sliding scale based on age has been retained despite the introduction of laws to combat age discrimination. However, the upper and lower age limits that previously applied have been abolished.

Continuous employment exceeding 20 years is ignored, and a maximum amount of weekly pay to be used in the calculation is prescribed by regulations made by the Secretary of State for Work and Pensions and reviewed annually. In 2009 the limit was £350. Redundancy costs are met entirely by the employer.

Subjects: Accounting — Law.


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