A plain-English walkthrough of statutory redundancy pay, notice, consultation rights, and what happens if your employer gets it wrong.
Being told your role is at risk of redundancy is stressful, and it's easy to focus only on what's happening emotionally rather than what you're legally entitled to. The good news: UK redundancy law gives you a specific, calculable set of rights. Here's exactly what they are.
If you're made redundant after at least two years of continuous service, you're generally entitled to three separate things, each calculated differently:
These are separate entitlements. Your redundancy payment does not replace your notice pay or holiday pay — you should receive all three.
The formula uses your age during each year of service: half a week's pay for years worked under 22, one week's pay for years worked between 22 and 40, and one and a half weeks' pay for years worked at 41 or older. Length of service is capped at 20 years, and weekly pay is capped at a statutory maximum (currently £700). Our redundancy pay calculator does this calculation automatically based on your specific age and service.
Statutory minimum notice depends on your length of service: one week's notice if you've worked between one month and two years, then one additional week per full year of service up to a maximum of 12 weeks for 12+ years of service. Your employment contract may specify a longer notice period — if so, the contractual notice applies instead of the statutory minimum, since you're entitled to whichever is more generous.
Many employers offer "pay in lieu of notice" (PILON), meaning you don't have to work your notice period but receive the equivalent pay instead. Whether this happens depends on your contract terms.
If your employer is proposing to make 20 or more employees redundant at one establishment within a 90-day period, they must consult collectively with employee representatives for a minimum period — 30 days for 20-99 redundancies, or 45 days for 100 or more. Even for smaller redundancy situations not covered by collective consultation rules, you're still entitled to meaningful individual consultation before a final decision is made.
A genuine consultation means your employer must consider alternatives to redundancy, explain the selection criteria being used, and give you a real opportunity to respond — not simply inform you of a decision that's already been made.
If multiple employees are doing similar roles and only some positions are being made redundant, your employer must use fair, objective selection criteria — things like skills, qualifications, performance records, or disciplinary history. Selecting someone for redundancy based on protected characteristics (age, sex, pregnancy, disability, race, religion) or because they're a trade union representative is automatically unfair and potentially discriminatory, regardless of how the redundancy is otherwise structured.
The first £30,000 of a genuine termination payment — including statutory and most enhanced redundancy pay — is free of Income Tax and National Insurance entirely. Only amounts above £30,000 are taxed at your normal rate, with employer (not employee) National Insurance also becoming due on the excess.
If you believe you were selected unfairly, weren't properly consulted, or that the redundancy was a pretext for getting rid of you for another reason, you may have a claim for unfair dismissal — provided you've worked for your employer for at least two years (with some exceptions where the two-year rule doesn't apply, such as discrimination-related dismissals). Claims must generally be brought to an Employment Tribunal within three months less one day of your dismissal date, so don't delay seeking advice if you think something was wrong with the process.
Sources: gov.uk redundancy guidance, ACAS. This article is for informational purposes only and does not constitute legal advice.