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Redundancy Entitlement - Legal redundancy entitlement
Minimum Redundancy Entitlement
Redundancy is a type of dismissal but is subject to greater legal regulation than ordinary dismissals. An employee who is made redundant is often entitled to financial compensation – redundancy pay or redundancy entitlement. Whether you receive a redundancy entitlement and how much you receive depends on whether it is statutory redundancy pay or contractual redundancy pay.
Statutory redundancy pay is set out by the law and in effect provides a minimum redundancy entitlement. It is owed to you if you have worked for your employer for at least two years continuously. You may also be entitled to redundancy pay if you were employed on a fixed-term contract of two years or more which expired and was not renewed because of redundancy. The amount that you are entitled to varies depending on your income, age and the period of continuous employment that you have worked with your employer.
Legal redundancy entitlement
Your employer might decide to provide more generously than what is required by law under the statutory redundancy entitlement scheme. They may do this through a contractual statutory pay scheme, detailed in your contract of employment.
If your employer manages to find you alternative suitable work within the company, they do not need to pay you redundancy pay – you cannot demand to be made redundant because you do not like the alternative job offer, although the job must of course be suitable and if it entails a decrease in salary or responsibility it could constitute constructive dismissal. If you find another job and leave your job for the new one before the end of the notice period given to you by your employer, your payment might be affected.
You do not have to do anything to claim your redundancy entitlement from your employer – they should automatically pay it to you. Your employer must give you a written statement showing how your redundancy entitlement has been calculated.
If your employer fails to give you a written statement or if they fail to pay your redundancy entitlement, you should write to them asking for payment. If your employer still refuses to pay you, you can make a claim to an employment tribunal. If your employer does not have any money to pay your redundancy entitlement, for example if they are declared insolvent, you can apply for payment from the National Insurance Fund.
If you need advice about your entitlement to redundancy pay, or any other factors about being made redundant, you should speak to an employment solicitor.
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