Do I have to give employees redundancy pay?

10 August 2017

Whether you have to give an employee redundancy pay will depend on a number of factors.

For an employee to be eligible for redundancy pay, they must tick the below three boxes.

1) They must be an employee in your business working under a contract of employment. Remember, a contract of employment doesn’t need to be in writing to be valid.

2) The employee must have been working at your business continuously for at least two years. The below breaks in employment do not affect an employee’s right to redundancy pay:

  • Annual leave
  • Sickness, maternity, paternity, parental or adoption leave
  • If the employee has worked overseas for your business
  • Any absence in-between an employee being unfairly dismissed and being reinstated
  • Time spent moving between related employers
  • Time spent serving time with the military service – with a reserve force, for example
  • Temporary lay-offs
  • Employer lockouts
  • Any down time built-up when a business is transferred from one employer to another
  • Time away as a result of one corporate body being taken over by another because of a legal change.

3) The employee must have been dismissed by reason of redundancy, or requested a redundancy payment from you following a period of four consecutive weeks, or any six weeks within a 13-week period on lay off or short-time working.

If an employee’s eligible and you have to give them redundancy pay, you’re required to pay any monies owed when you dismiss them – or soon after.

Remember

If you’re making redundancies, it’s essential that you consult fully with the employee(s) who’re facing redundancy, and explore all viable options to avoid redundancies.

Also, if there’s a large group of people from which you’re making redundancies, make sure you follow a fair selection process at all times.

Calculations

To get an idea of how much redundancies would cost your business, head over to our redundancy calculator. All you need is an employees’ age on termination, how many years they’ve been with your business for and what their weekly wage is. Then we’ll do the maths and tell you:

-How many weeks’ pay they’re due
-What their statutory payments is
-What their uncapped payment would be.

Got a question?

If you’ve got a question on redundancy – or anything else for that matter, get in touch and one of our experts will be with you.

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