How much is redundancy pay?
It’s a reasonable question – but one that has more than one answer…
Because redundancy pay and statutory redundancy pay are two different things.
Statutory redundancy pay is the legal minimum that an employer is required to pay, while redundancy pay can be significantly higher.
So, How Much Redundancy Pay Are You Entitled To?
Well, let’s start with statutory redundancy pay.
First thing’s first, you should know that you can ONLY qualify for statutory redundancy pay if you’ve been working with your current employer for a minimum of two years.
How much statutory redundancy pay you receive is calculated based on several factors, including:
- Your age
- Your weekly pay
- Length of service
When it comes to your salary, the calculation is based on the average amount you earned in the 12 weeks before receiving notice of redundancy. That includes any regular overtime, bonuses, and commission that you regularly receive.
You may even be entitled to more than the statutory minimum if it’s specifically outlined in your contract, so it’d be wise to check whether there’s a specific clause or note on redundancy pay in your employment contract.
However, if your employer offers an alternative role that is suitable for your skillset and you turn it down, it COULD affect your eligibility for statutory redundancy pay – which is important to bear in mind.
The first £30,000 of any redundancy pay or settlement agreement is tax-free, which is worth bearing in mind…
What If I Want More Than The Statutory Redundancy Payment?
If you’re looking for a more significant severance package, then a settlement agreement might be the best option.
There’s every chance that your employer will be willing to discuss a settlement agreement.
That’s because redundancy isn’t a situation that anyone enjoys, really. So any opportunity to come to a fair agreement that has agreeable terms for both parties is usually welcomed by employers.
A settlement agreement will include several key aspects such as:
- A termination payment
- Any remaining salary, notice pay, holiday pay, bonuses, and commission
- A written agreement for the employee to waive their right to bring legal action at a later date
- A signature by a solicitor or official representative
- A ‘non-derogatory clause’ where both the employee and employer agree not to say anything negative about each other
- A non-disclosure clause
Having a settlement agreement or redundancy solicitor on hand can be invaluable.
Considerations need to be made over your long-term financial future and how any settlement agreement will ensure that you’re comfortable moving forward.
Having someone on your side who is a legal expert can be invaluable, especially when it comes to knowing what your employer is looking for, where it’s best to settle, and what a fair agreement would be…
Redundancy Solicitors Near Me
Redundancy can be a tricky process to navigate for everyone involved. People who have been employed for several years are leaving the company through no choice of their own, and that is difficult to deal with financially and emotionally.
At Solicitors Near Me, we know how important it is to have expert employment solicitors to help achieve your goals – which is why we connect you with employment solicitors near you for FREE.
There’s no obligation to proceed with the solicitors we connect you with, and there’s absolutely no cost until you decide to proceed with them…
Redundancy Advice Near Me
Whatever your needs, there’s a solicitor near you that help you with redundancy legal advice…