The precise definition of redundancy is to be found in section 139 of the Employment Rights Act 1996, but basically if any of the following situations apply it is a redundancy:- 

 

What exactly is a redundancy? 

 

 

Another point worth noting is that an employee is only entitled to a statutory redundancy payment if they have worked for their employer for a period of two years continuously. (However, whilst this is the law, an employer can make a payment as compensation for loss of employment if you have been employed for less than two years). 

 

You can calculate your statutory redundancy payment by logging onto the government website https://www.gov.uk/calculate-your-redundancy-pay. 

 

Sometimes an employer will offer an enhanced payment in return for you entering into a settlement agreement, whereby you agree not to bring any proceedings against them in the Courts or Employment Tribunal. 

I am seeing more settlement agreements coming through at the present time as companies are finding that they are having to restructure their businesses due to the financial impact of the Coronavirus. 

 

Whilst redundancy can be very stressful, compensation for loss of employment (which is tax free up to £30,000.00) can provide a much needed lifeline whilst looking for a new job. A settlement agreement which provides for a compensation payment will, if acceptable to both parties, enable them to move on. An agreed Reference can be included in the settlement agreement which can help when looking for work. 

 

 

Email me at diane@dsmlegal.co.uk with your telephone number and the best time to call you, or telephone us on 01925 937070.