Redundancy payments are the silver lining in the cloud. Statutory redundancy payments tend not to be very generous, but they’re certainly better than nothing. But who exactly is entitled to one?
Entitlement to Statutory Redundancy Pay
The basic rule about Statutory Redundancy Pay (SRP) is that you are entitled to it if you have worked for your employer continuously for more than two years before being made redundant. You need to have a contract of employment, but this does not have to be in written form. Virtually everyone who does work for anyone else establishes a de facto contract of employment by doing so.
If you have less than two years’ continuous service, unfortunately you will not be entitled to any Statutory Redundancy Pay at all, although your contract of employment may give you rights to non-Statutory Redundancy Pay.
Part-time workers are entitled to SRP just as full-time workers are. Short-term casual workers, however, are not. If you work for a company through an agency, for example, legally your employer is the agency, so you will not be entitled to anything if the company itself announces some redundancies.
Self-employed people and freelance workers are generally not entitled to Statutory Redundancy Pay. Similarly, directors of companies usually have no entitlement.
Workers on fixed-term contracts are entitled to SRP if the duration of the contract is two years or more and it is not renewed by reason of redundancy.
If you have been put on short-time working by your employer for four weeks in a row, or six weeks within a 13 week period, you are also entitled to redundancy pay.
When You Are Not Entitled to Statutory Redundancy Pay
If you are dismissed from your job, rather than made redundant from it, you are not entitled to statutory redundancy pay. If you resign from your job, whether in a normal way or because you feel that you have been constructively dismissed, you are not entitled to SRP either.Certain categories of worker are always excluded
from the statutory entitlement to redundancy pay. Among others, this include apprentices and those who serve in the military.
If you leave the job from which you are being made redundant and start a new one during your notice period, you may lose your entitlement to SRP.
If your employer offers you a new job as an alternative to making you redundant, and you reject it without good reason, you may lose your entitlement to SRP. Your employer is entitled to refuse to pay your SRP if the new job is substantially equivalent to the old one. You may feel that, in some important respect, it was not equivalent. When there is a dispute about this, it would have to be aired at an Employment Tribunal. If you win there, your employer would be forced to pay you SRP.
When the Company You Work For Has Been Taken Over
In general, the Transfer of Undertakings Protection of Employment regulations (TUPE) ensures that when the company you work for is taken over by another, your contract of employment is automatically continued by the new proprietor. This means that if you worked a company for one year before it was taken over, and then worked for the new company for another year after that, you would be entitled to statutory redundancy pay because, from a legal perspective, you have completed two years of continuous work for the same employer.
If the company you worked for was taken over, and the new proprietor agreed to continue your employment as before, but, for some reason, you decided not to accept this, you would not be entitled to redundancy pay. Your decision would be considered a form of voluntary resignation.
Entitlement to Statutory Redundancy Pay – Conclusion
In this age of changing work patterns, it is not always clear at first glance who is entitled to Statutory Redundancy Pay. But in recent years the government has been hardening regulations somewhat to bring some formerly excluded categories of worker into the fold.