Redundancy payment

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Under the Employment Rights Act 1996, you are required to set out in writing how the SRP has been calculated.

Author: Roxanne Bradley
Published:
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This article is 4 years old.

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If an employee has acquired two years of continuous employment, they will be entitled to a statutory redundancy payment (SRP). Ensure to check the employee’s contract, they may have a contractual right to an enhanced redundancy payment.

Under the Employment Rights Act 1996, you are required to set out in writing how the SRP has been calculated. However there is no official or prescribed format for the calculation which you must follow. To ensure the employee can see how the SRP figure has been calculated, we would advise to include the employee’s relevant start date, end date, total number of complete years, their age and their gross week’s wage.

To work out the SRP, you will need to have ready:

–    Employee’s age

–    the number of complete years service (up to the maximum of 20 years)

–    the figure for the employees weeks pay (statutory cap is £479.00)

Once you have the information, you can use the governments website :

https://www.gov.uk/calculate-your-redundancy-pay

Dependent on the age of the employee, will be dependent on how much pay they are entitled to per each completed year of service.

Aged 41 + will be entitled to one and a half weeks for each complete year of service

Aged 22-40 – one weeks pay for each complete year of service

Aged 21 and under – half a week’s pay for each complete year of service

The employee’s length of continuous employment and age for SRP purposes should be calculated at the “relevant date”. This is the termination date when the employee has given their proper notice period. If the employee has been made redundancy without the statutory minimum notice to which they are entitled to (even if they have been paid in lieu of such notice), the relevant date is when the statutory notice period would have expired had it been given.

Roxanne Bradley

Legal Advisor

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