Employees you make redundant may be entitled to redundancy pay, this is referred to as a statutory redundancy payment.
To be eligible the employee must meet the below criteria
be an employee working under a contract of employment
have at least 2 years’ continuous service
have been dismissed, laid off or put on short-time working - those who opted for early retirement don’t qualify
How to calculate Statutory Redundancy
Employees are entitled to
1.5 weeks’ pay for each year of employment after their 41st birthday
a week’s pay for each year of employment after their 22nd birthday
half a week’s pay for each year of employment up to their 22nd birthday
The employees Length of service is capped at 20 years and weekly pay is capped at £508.
The maximum amount of statutory redundancy pay an employee can receive is £15,240.
Employers can give their staff extra redundancy pay if they want to, or pay redundancy to employees who have a qualifying period of less than 2 years.