Statutory Redundancy Notice Periods and Payment in Lieu of Notice
Whether you’re an employer or employee it’s imperative to know the legal notice periods when a member of staff is made redundant. There are 3 categories which every employee will be categorised under and each redundancy notice period depends on how long the employee has worked for the business. Below are the legal minimum redundancy notice periods that an employer can give any employee, the company may choose to offer more notice about their redundancy but cannot legally give an employee less than these notice periods.
Employed between 1 month and 2 years
If an employee has worked for a business between one month and 2 years then the employer must give the employee at least one week’s notice that they are being made redundant.
Employed between 2 years and 12 years
If an employee has worked for a business between 2 years and 12 years then if the employer is going to make that member of staff redundant they must legally give them one week’s notice for every year they have worked at the company.
For example, if an employee has worked there for 4 years then the employer must legally give the employee a minimum of 4 weeks notice when making them redundant.
Employed for 12 years or more
This is the final cut-off point for redundancy notice periods. If an employee has worked for a company for 12 or more years then the legal minimum notice period when making someone redundant is 12 weeks, no matter how long the employee has worked there after 12 years.
For example even if an employee has worked for a company for 20 years then the employer legally only has to give that employee 12 weeks notice when making them redundant.
Payment in Lieu of Notice
There is one slight ‘loophole’ in the system regarding redundancy notice periods and it is something to bear in mind for any employee when reading through their contract of employment. The term ‘Payment in Lieu of Notice’ can be legally used within an employee’s contract or can be offered verbally when making the employee redundant and it simply means the employer does not have to give the employee any notice when making them redundant. Instead, the employer pays the employee additional payment in replacement of the notice period that would have otherwise been legally required (as listed above).
So let’s take one of my examples above to clarify how this works and say an employee has worked for a business for 4 years. Instead of having to give the employee their legal 4 weeks notice (as stipulated by the legal minimum redundancy notice periods) the employer would simply make the employee redundant with immediate effect and pay them the equivalent of their salary for those 4 weeks notice. This is in addition to any other payments such as overall redundancy pay etc.
To clarify, instead of being giving time for the redundancy notice period, the employer is giving money for the notice period.
Statutory Redundancy Pay
As well as giving a statutory notice period, an employer must also provide an employee with a redundancy payout depending on how long they have worked for the business. This amount varies greatly and so I’ve also written a blog on how to calculate statutory redundancy pay which can be read here – https://zlogg.co.uk/calculate-statutory-redundancy-pay/
Again these are the legal minimum requirements that an employer has to offer, they can pay more redundancy pay than these amounts but not less.
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