Redundancy pay

Who is entitled to redundancy pay?

Statutory redundancy pay normally applies to an employee who is being made redundant and has at least two years of continuous employment. Status and service both matter. Someone described casually as a contractor may have a different legal status, while a short break in work does not always break continuity.

Start with the reason for dismissal, the person's employment status and their continuous service. Then check the contract, handbook and any established scheme. An employer can offer enhanced redundancy pay, but that sits alongside the statutory minimum rather than changing who qualifies for it. The current Acas redundancy-pay guidance explains the core eligibility test.

How should statutory pay be calculated?

The statutory formula uses the employee's age during each completed year of service, the number of eligible completed years up to the statutory maximum, and a week's pay subject to the current cap. Do not copy a weekly limit from an old letter or spreadsheet. Use the live GOV.UK redundancy-pay guidance and calculator.

The relevant date can require care where employment ends immediately with payment in lieu of notice. Statutory notice may move the date used to count service far enough for another completed year to qualify. Work from the actual dates and notice entitlement before finalising the result.

Give the employee the calculation

The employer must give the employee a written statement showing how their statutory redundancy payment was calculated. Record the birth date used, start and end dates, completed years counted, weekly pay figure, statutory cap and any enhanced amount separately. That makes the answer reviewable instead of presenting one unexplained total.

Redundancy pay is not notice pay, accrued holiday pay or ordinary final salary. Show each part of the final payment separately, including when it will be paid. If eligibility or the relevant date is disputed, check the current official guidance before confirming the figure.