Redundancy is where an employee is dismissed because the employer’s business is closing down, or because there is no longer a need for the employees’ work within the business.

If the individual employee has two or more years of continuous service within the company then they have a right to a redundancy payment from the employer.  (Except in cases of fixed term contracts of two years or more where the individual has agreed to forego their entitlement when the contract is not renewed.)

This is calculated according to the age of the individual and complete years of service with an employer up to 20 years maximum.  

The amounts are as follows:

• One half a weeks’ pay for years employed between the ages of 18 and 21.
• One weeks’ pay for years employed between the ages of 22 and 41.
• One and a half weeks’ pay for years employed between the ages of 42 and 64.
• Between the ages of 64 and 65 the payment is reduced by one twelfth for every complete month the person is over 64.  

NB: Service below the age of 18 does not count. A weeks’ pay = gross pay received up to a maximum of £250 per week. Where hours of work vary a weeks’ pay is averaged over a 12 week period.

Employees with two or more years service who are under notice of dismissal for redundancy have the right to reasonable paid time off during working hours, to look for another job or to make arrangements for training for future employment.  

How much time off is reasonable should be agreed between the employer and employee.  

For more information on redundancy pay go to our Links Page under Redundancy.

Jobcentre Plus has Rapid Response Teams which are there to help employers and employees when redundancies are unavoidable.  

If your redundancies are deemed “significant” then you need to contact the Business Manager and Regional Manager of your local Jobcentre Plus to request the rapid response service for the members of staff being laid off.  

Please note that what is considered significant varies from region to region.  For more information contact your local Jobcentre Plus Business Manager.  

A typical bid for these services will include skills and training analyses of the relevant staff, to include advice and guidance on ways forward.  This will highlight the needs of staff, for example if the industry is dying out then there will be a large need for re-training.  Alternatively if the type of business is not under threat, for example a supermarket, then staff may only require job-hunting training.  

In this way, the programme agreed will reflect the training needs of the staff.   If an employer is intending redundancies then the Department of Trade and Industry must be informed in writing.  See our Links Page for website details.  

Alternatively nextstep is there to help with learning and work enquiries so individuals can approach our experienced advisers for information and advice. Why not encourage your staff to ring our FREEPHONE number 0800 138 5550 between 9am-5pm Monday to Friday and speak to one of our friendly local advisers.    

Our website www.nextstep-bdp.org.uk gives full information on the nature of our service and how we can help individuals to change their lives.