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FAQ Item

We are a small manufacturing firm and are, unfortunately, assessing the potential cost of a number of redundancies. How can we calculate roughly what our staff will receive as a pay out?

The statutory redundancy payment is calculated based on the number of years a person has worked for a company, how old they are and their weekly pay. Since October 2006 if you make someone redundant they would receive;

one and a half week's pay for each complete year of employment when they are 41 or older
one week's pay for each complete year of service between the ages of 22 and 40
half a week's pay for each complete year worked up to the age of 22.

The maximum number of years that can count is 20 towards the calculation. The weekly pay rate is usually the gross weekly pay at the time of redundancy up to the maximum limit of £350. If the weekly pay fluctuates, an average of the 12 week period running up to the redundancy date is taken.