Redundancy
What is dismissal?
If your worker is to be entitled to a redundancy payment, he or
she must have been dismissed by you rather than left your employment
by choice. The reason for the dismissal must be redundancy.
Should your employee be on a fixed term contract, which ends without
renewal, this is considered dismissal and he or she may qualify
for a redundancy payment.
Your Personal Assistant who has been given notice of redundancy
may still leave early by agreement with you and still be entitled
to receive payment. The minimum period of notice by law is one week
for every complete year worked, up to a maximum of 12 weeks.
What is Redundancy?
Redundancy means that you have dismissed an employee because of
a need to reduce the number of staff that you have working for you.
In this situation you are required to give your employee notice
of redundancy and, if applicable, make redundancy payments.
You may not make a worker redundant and then employ someone else
to do the same job. By making an employee redundant, you are implying
that his or her job no longer exists. If you make an employee redundant
and try to recruit a replacement, you risk being taken to an industrial
tribunal for unfair dismissal.
When must I make Redundancy Payments?
You must make redundancy payments when you make an employee redundant
who has worked for you for at least two years since the age of eighteen.
He or she will need to meet other conditions that are discussed
later in this information sheet.
Who qualifies for Payment?
Only people working under a contract of employment are entitled
to receive redundancy payments. A contract exists in law as soon
as an employee starts work. It can be written or verbal, be fixed
term or last for any period of time.
Who will not be entitled to Redundancy?
Self-employed people may not be offered redundancy. Members of
your immediate family working in your home have no entitlement to
redundancy payments.
Are there any rules on length of service?
Your worker must have at least two years continuous service working
for you before he or she qualifies for redundancy payments.
How do I work out my employee’s length of service?
For the purposes of redundancy payments, the maximum length of
service that can be taken into account is twenty years. The length
of continuous service is normally counted backwards from the date
on which your employee’s notice ends. If you have given less
than the legally required notice, the extra notice your worker should
have received will be added on.
If your Personal Assistant was absent for certain reasons, for
example, illness, pregnancy or temporary shortage of work, these
absences can still count towards continuous employment whether or
not his or her employment contract was suspended.
What is Statutory Redundancy Pay?
The amount of statutory redundancy payments depends on: how long
your worker has been employed by you, your worker’s age and
weekly pay.
Statutory redundancy pay is worked out as follows:-
- ½ week’s pay for each complete year of employment
when your workers were aged under 22. Employment before the age
of 18 is ignored when working out statutory redundancy pay.
- 1 week’s pay for each complete year of employment when
your workers were between 22-40 years old.
- 1½ week’s pay for each complete year of employment
when your employees were over 41 years of age.
The maximum number of years of employment that can count is 20.
Employment is counted up to the relevant date, which is the date
your employee’s notice expires. If you have not given your
worker any notice, it is the date on which the notice would have
expired had they been given it.
What is a week’s pay?
A week’s pay is considered to be the basic pay that your
worker would normally receive in a week. This is calculated, for
the purposes of redundancy payments, without taking over-time into
account.
The calculation date for your worker’s redundancy payment
will normally be one of the following:
- The day that you give your worker his or her redundancy notice.
The minimum legal notice is one week for each year of service
up to a maximum of twelve weeks.
- If the notice you gave is longer than the minimum required
by law, the calculation date is the date on which minimum notice
would have needed to have been given to stop your worker’s
employment on the same day as it actually ceased; or
- The day your employee’s job ended if you had not given
the appropriate notice.
There is a maximum limit on the amount that must count as a week’s
pay. This applies even if your worker earned more than the maximum
amount. The current maximum weekly pay for 2010 is £380 per
week.
What if I or my worker dies?
If at the time of your death you are employing Personal Assistants,
your estate may be liable to make redundancy payments. In the event
of an employee who is waiting for a redundancy payment dying before
he or she receives it, the payment should be made to his or her
personal representative.
How will disagreements about Redundancy be dealt with?
Disputes regarding redundancy payments can be dealt with through
industrial tribunals, but it would be preferable to try to resolve
any disagreements before they would get to a tribunal.
Where can I get further help?
If you need further information on redundancy, dismissal or statutory
redundancy payments, please contact us.
or
Labour Relations Agency
2-8 Gordon Street
Belfast BT1 2LG
Tel: 028 90 321 442
Fax: 028 90 330 827
Email: info@lra.org.uk
Web www.lra.org.uk
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