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What redundancy pay will I receive?
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It will depend on the company as to what redundancy pay you will get. Some companies only offer the statutory minimum redundancy pay but others offer more. Some employers may offer a lump sum on leave to cover any shortfalls and to avoid any tribunal claim.
The amount paid is calculated by taking the employee’s age, years of service and average weekly pay to arrive at the figure. The weekly pay is limited to a maximum of £330 per week and the maximum years that will be considered is 20.
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So to calculate it:
For the years of service up to the age of 21, the employee’s weekly pay is multiplied by 0.5 for each completed year of service.
For the years between the age of 22 and 40, the employee’s weekly pay is multiplied by 1.
For the years from the age of 41 on, the employee’s weekly pay is multiplied by 1.5.
The maximum payout that can be awarded is: 20 years * £330 * 1.5 = £9,900.
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You should be paid on the last day that you work or as soon as possible.
If you work shifts and your earnings varied as a result, a similar calculation is done but the average hourly earnings are multiplied by the average weekly hours over 12 weeks. If you work no fixed hours then your weeks pay will be your average weekly earnings in the 12 weeks before the calculation date.
It does not matter how many hours you have worked, you must just have worked continuously for the same employer for 2 years to receive redundancy pay.
You should not have to pay tax on redundancy pay up to £30,000. Pensions may not be offset against statutory redundancy pay made to employees dismissed on or after the 1st October 2006.
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