The Compendium

Redundancy

Redundancy is a form of dismissal from a job. It happens when employers need to reduce their workforce. If an employee is being made redundant, they might be eligible for certain things, including: redundancy pay and a notice period.

An employee must be selected for redundancy in a fair way, for example because of their level of experience, or capability to do the job.

They cannot be selected because of age, gender, or if they are disabled or pregnant. If they are, this could be classed as an ‘unfair dismissal’.

An employee will normally be entitled to statutory redundancy pay if they have been working for their employer for two years or more. The redundancy pay will be:

• half a week’s pay for each full year they were under 22
• one week’s pay for each full year they were 22 or older, but under 41
• one and half week’s pay for each full year they were 41 or older Length of service is capped at 20 years.

Their weekly pay is the average they earned per week over the 12 weeks before the day they received the redundancy notice.

If the employee was made redundant on or after 6 April 2022, their weekly pay is capped at £571 and the maximum statutory redundancy pay they can get is £17,130. If they were made redundant before 6 April 2022, these amounts will be lower.

This weekly amount is updated on an annual basis.

[See ‘Unfair Dismissal’ and ‘Statutory Redundancy Pay’.]

Redundancy Payments Office

The Redundancy Payments Office (RPO) is a Government office in Birmingham dealing with the payments of employees’ redundancy claims.

[See ‘Redundancy’.]