Need legal advice now from a redundancy solicitor?
Call, email or provide us with a few details of your matter, and we’ll help you arrange an initial consultation. You’ll get:
- Unlimited time to discuss your matter with a redundancy solicitor.
- An outline of your legal position and available options.
- A clear time and fee estimate for your case.
Other forms of employment law.
Constructive Dismissal
Discrimination
Employment Contract
Employment Tribunal
Settlement Agreement
Unfair Dismissal
Other forms of employment law.
Constructive Dismissal
Discrimination
Employment Contract
Employment Tribunal
Settlement Agreement
Unfair Dismissal
Commonly asked questions on redundancy.
Redundancy can become highly complex, especially when it comes to the employer conducting the correct redundancy procedure. As a result, our redundancy solicitors have answered some of the most common questions on the topic.
1. What is redundancy?
Before outlining the correct redundancy process, employers and employees alike need to understand what redundancy means.
Redundancy is when you dismiss an employee because the company no longer needs anyone to do their job. There are various motives behind companies making redundancies. Some of the primary examples are because your company is:
- Closing down or changing its location
- Changing the way it works, for instance, relying more on machinery
- Changing the service/product it offers
When an employer makes an employee redundant, the employer must demonstrate that the job will no longer exist.
2. How much is redundancy pay?
Your redundancy pay will depend on your annual salary (before tax) and the number of years you’ve worked at the company. If you have been working for the company for at least two years, then for each full year you have been working, the company owes you:
Age | Entitled Pay |
Under 22 | Half a week’s pay |
22 – 40 | One week’s pay |
41 plus | One and a half week’s pay |
Statutory redundancy pay comes with terms and conditions, which include:
- Whilst working, if you turned 22 or 41, the higher rates will only apply for the full years you were aged over 22 or 41.
- The maximum weekly amount of redundancy pay you can get is capped at £544, regardless of whether you earn more.
- You can only get redundancy pay for a maximum of 20 years’ work. For example, if you’ve had your job for 28 years, you’ll only get 20 years worth of pay.
Example:
Chris (aged 25) has worked at an accountancy firm for five years, earning £400 a week. Unfortunately, Chris has just been made redundant, and his pay is as follows:
- Half a week’s pay from when he was under the age of 22 = £400
- Three week’s pay for the three years he worked over the age of 22 = £1,200
Overall, Chris will receive a statutory payment of £1,600. However, this payment is excluding any contractual pay.
3. Is redundancy pay taxable?
Redundancy tax is payable after the first £30,000. This figure may sound unlikely, but other factors are calculated in redundancy pay which includes:
- Contractual notice pay (any form of additional amounts of money that your contract says you can get on top of your statutory amount).
- Non-cash benefits. For example, gifting a company laptop, phone or car. Any assets which become a gift will be given a cash value and added to your total redundancy pay.
Tax is applicable on any portion of your redundancy pay above the value of £30,000. The tax rate for any value above £30,000 is the same as your other salary.
Holiday pay and PILON will be treated as other payments rather than redundancy pay as they’re both paying for work rather than compensation for job loss.
4. How does redundancy work?
- Explore whether or not redundancies can be avoided
- Identify the employees who are to be made redundant
- Hold redundancy consultations
- Give staff notice
- Deciding on the redundancy pay
For more information on how redundancy works, please contact our solicitors directly on 020 3007 5500.
5. Can I contest redundancy?
If an employer hasn’t completed the correct redundancy procedure, an employee can contest the redundancy. However, contesting redundancy can be a complex procedure. Therefore, it’s always best to seek help from a solicitor who has experience in redundancy law to ensure the redundancy is fair and that you’re protected.
Need legal advice now from a redundancy solicitor?
Tell us about your case and we’ll get back to you the same day.
Meet our redundancy team.
Paul Britton
Head of Employment Law
Joseph Navas
Redundancy Solicitor
Sophie Campbell-Adams
Redundancy Solicitor
Rory Lindsay
Trainee Solicitor
Paul Britton
Head of Employment Law
Joseph Navas
Redundancy Solicitor
Sophie Campbell-Adams
Redundancy Solicitor
Rory Lindsay
Trainee Solicitor
Why Britton and Time Solicitors?
Employment law is our bread and butter and our redundancy solicitors have worked on everything from straightforward settlement agreements to highly contested redundancies. We’ll always guarantee:
Award-Winning Service.
You are our priority, and the law is our speciality. Our award-winning redundancy solicitors in London and Brighton ensure you know exactly where you stand from a legal perspective so you can make a well-informed decision.
Full Billing Transparency.
No fee surprises. Ever. Our redundancy solicitors will inform you from the outset on how much your case will cost, and we will do everything in our power to keep costs down and within your original fee estimate.
Regular Communication.
With fortnightly updates on your case, you’ll never be left in the dark. Our redundancy solicitors in London and Brighton ensure you know exactly how your case is progressing and are with you every step of the way.
Our reviews.
It’s not about how good we think our solicitors are; it’s about what you think.
Will to Win
There are three things that make Britton & Time, and in particular Paul, stand apart from other law firms: knowledge, communication and a will to win.
Rated excellent by over 95% of our clients.
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Need legal advice now from a redundancy solicitor?
Call, email or provide us with a few details of your matter, and we’ll be able to help you the same day.