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Redundancy Pay How Much?

Redundancy law gives rise to many complicated questions, but some of the most frequently asked questions are relatively easy to resolve. One such question is 'How much will I get if I am made redundant?' or (from the other side), 'How much will cost me to make this person redundant?'

The calculation is based upon the employee's age, how long he has worked for th company, and the gross average wage. Each of these terms has a definition which affects the amount.

The amount allowed is one and half week's pay for each year of employment consisting entirely of weeks in which the employee was aged 41 or over, and/or one week's pay for each year of employment above 21, and a half week's pay for each year of employment below that age. There is then a maximum number of years to take into account of twenty. The payment is subject to a maximum limit of 230.00 per week. The calculation is based upon average wages without deduction of tax and not taking into account overtime unless such overtime is required to be provided by the employer and undertaken by the employee.

Where an employee is 65 or over the total is reduced by a 12th for each month by which the age exceeds 64. No employment before the 18th birthday counts.

It is usual now for an employer and an employee to safeguard their positions by ensuring that the employee is given independent legal advice on all the issues which might arise. It is usual then for the employer to pay a reasonable sum of the contribution towards the cost of that advice. The parties then sign an agreement under which the employee foregoes any right to make a claim for any of the matters which sometimes arise on termination of employment.

Important: Please note that our law-bytes are retained for archival purposes only. The law changes, and these notes are often, now, out of date. You must take direct advice on your own personal situation and the law as it currently stands.
All information on this site is in general and summary form only. The content of any page on this site may be out of date and or incomplete, and you should not not rely directly upon it. Take direct professional legal advice which reflects your own particular situation.
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18 October 2013 351 18 October 2013