Redundancy Pay: Your Rights in the UK

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Миколаєнко Олена Василівна

Attorney

United Kingdom / England

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Publication date: 03.09.2025

Redundancy pay is a financial compensation provided to employees in the UK when their job is terminated due to economic, organisational, or technological reasons. UK labour law ensures robust protection of employee rights UK during redundancy. Legal Marketplace Consultant offers employment contract consultation and HR legal consulting to assess your eligibility, conduct legal review employment contract, and provide a clear action plan to secure your payments. Our services support all types of employment UK, including contract employment UK, fixed-term contract UK, and zero-hours contract, ensuring fairness and compliance.

What is Redundancy Pay

Redundancy pay is a statutory entitlement under the Employment Rights Act 1996 for employees whose roles are eliminated due to business closure, restructuring, or reduced workload. It aims to support workers who lose their jobs through no fault of their own. For example, if your contract employment UK or fixed-term contract UK is terminated due to redundancy, you may be eligible for statutory redundancy pay. Legal review employment contract from Consultant verifies whether your employer adhered to UK labour law and calculated your payment correctly.

Key reasons for redundancy include:

• Closure of the business or a specific department.
• Decreased demand for a particular type of work.
• Adoption of technology that replaces jobs.
• Relocation of the company to a new location.

UK labour law advice from Consultant ensures your redundancy is lawful and protects your employee rights UK, particularly for those on zero-hours contract or other working arrangements UK.

Who is Eligible for Redundancy Pay

UK labour law grants statutory redundancy pay to employees with at least two years of continuous service. This applies across various types of employment UK, such as:

1. Permanent employees with contract employment UK.
2. Workers on fixed-term contract UK, eligible under similar conditions.
3. Individuals on zero-hours contract, if classified as "employees" under Employment Rights Bill 2025.
4. Self-employed individuals whose status aligns with contract employment UK, as per Uber v Aslam (2021).

If you’re unsure about your eligibility, employment contract consultation from Consultant clarifies your status. Our legal review employment contract ensures your working arrangements UK comply with legislation and confirms your entitlement to redundancy pay.

How Redundancy Pay is Calculated

Statutory redundancy pay is calculated based on three factors: age, length of service, and weekly pay (capped at £719 per week in 2025). The formula is:

1. 0.5 week’s pay for each year of service under age 22.
2. 1 week’s pay for each year of service between ages 22 and 40.
3. 1.5 weeks’ pay for each year of service at age 41 or older.

The maximum service considered is 20 years, with a cap of £21,570 in 2025. For example, a 45-year-old employee with 10 years of service and a £600 weekly pay would receive: 10 × 1.5 × £600 = £9,000. Some employers offer enhanced redundancy pay, exceeding the statutory minimum. HR legal consulting from Consultant reviews your contract employment UK to identify such provisions and maximise your entitlement.

Additional Rights During Redundancy

Beyond redundancy pay, employee rights UK include further protections:

• Fair Selection: Employers must use objective criteria, like performance or qualifications, for selecting redundancies.
• Consultation: Mandatory consultation is required, especially for 20+ redundancies (30–45 days under Trade Union and Labour Relations Act 1992).
• Alternative Employment: You’re entitled to offers of suitable alternative roles and a 4-week trial period without losing redundancy pay rights.

If these rights are violated, you can file a claim with an Employment Tribunal. UK labour law advice from Consultant supports tribunal claims, while legal review employment contract identifies breaches in your fixed-term contract UK or zero-hours contract.

How to Claim Redundancy Pay

To secure your redundancy pay, follow these steps:

1. Confirm Eligibility: Ensure you have two years of service and "employee" status. Employment contract consultation from Consultant verifies this.
2. Receive Notice: Employers must provide 2–12 weeks’ notice based on service length (Employment Rights Act 1996).
3. Request Payment: If payment is not offered, submit a written claim. HR legal consulting from Consultant assists with drafting claims.
4. File a Tribunal Claim: If denied, appeal to an Employment Tribunal within 3 months (6 months from 2026).

Legal Marketplace Consultant supports you from reviewing your working arrangements UK to tribunal representation, ensuring you receive your entitled payments.

Frequently Asked Questions About Redundancy Pay

How to Secure Your Redundancy Pay

Review Your Contract: Order legal review employment contract from Consultant to confirm entitlements.

Seek Expert Advice: Use employment contract consultation to evaluate your case.

Challenge Denials: File a tribunal claim with HR legal consulting support.