Redundancy - entitlement to redundancy pay

Qualifying for redundancy pay

To qualify for statutory redundancy pay an employee must have been employed for two years by the date of dismissal, irrespective of their hours of work.

Unfair dismissal claims can be pursued only after one year of qualifying service but this is not sufficient for redundancy claims.

Criteria for non-qualification

Employees are not entitled to statutory redundancy pay if:

• offered suitable alternative work
• guilty of misconduct
• industrial action is occurring and redundancy notice is served

The time limit for submitting an unfair selection for redundancy claim is three months from the date of contract termination but six months if the claim is just related to a failure to make a redundancy payment. Employees will also forfeit the right to claim statutory redundancy pay if they leave work prior to the actual issue of the redundancy notice. But employees under notice can mutually agree with their employers to extend the notice, for example, in the expectation that the company’s trading position will improve, without compromising their redundancy entitlement.

Specific types of workers are excluded from the statutory scheme but have alternative arrangements - crown employees, NHS workers and most merchant seafarers. Other excluded categories are sharefisherman, domestic servants, those employed by close relatives, foreign government employees and employees married to their employer.