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Questions & Answers

Know Your Redundancy Dismissal Rights

These questions and answers explain your key legal rights and entitlements when being dismissed for reason of redundancy.

If you are being dismissed for reason of redundancy, you should check that the circumstances of your case mean that you are redundant within the meaning of the statutory definition. If not then your dismissal may well be unfair.

A redundancy dismissal occurs if there is a:

  • complete closure of your employer’s business. For example where the entire business ceases to trade.
  • closure of your place of work. For example, your employer has three branches and decides to close the branch where you work.
  • reduced requirement for employees to do work of a particular kind. An example is where your employer decides it needs to reduce the number of engineers from six to three.

If you are being dismissed genuinely for redundancy, the following questions and answers explain your key entitlements.

Yes, if you are an employee who has been continuously employed by the same employer for two or more years and been dismissed for reason of redundancy. In most cases if you resign from your employment you will not be entitled to a redundancy payment.

A statutory redundancy payment is calculated based on your age, length of service and weekly pay.

You will be entitled to an enhanced redundancy payment if your terms and conditions of employment provide for it. Check your contract, employee handbook or other relevant policy. It could also be implied into your contract by custom and practice. You may well need to take specialist legal advice if your employer disagrees you are entitled to an enhanced payment.

In addition to any redundancy payment you have the right to payment for your notice period, accrued holiday pay and any outstanding expenses, bonus or commission payments.

A redundancy dismissal is likely to be unfair if:

  • redundancy was not the true reason for your dismissal or
  • if your employer did not follow a fair redundancy procedure before giving you notice of dismissal or terminating your employment.

For more details about what makes a fair redundancy dismissal please see Is your redundancy dismissal fair or unfair?

Yes, in most cases up to the first £30,000 should be payable to you free of all tax and national insurance deductions. For more details about the tax treatment of redundancy and compensation payments see The tax treatment of compensation payments.

It all depends. Your employer may well want to avoid the risk of ending up in the employment tribunal justifying the fairness of its redundancy dismissals. If you sign the settlement agreement this creates a legally binding agreement that prevents you from starting or continuing with any tribunal or court claim against your employer. Before signing you need to be independently and legally advised about the merits and value of the offer.

The employment law solicitors at Quantrills specialise in advising employee clients about the terms of their settlement agreements. Full details about how we can help you with yours is at Settlement Agreements.

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