YOUR
RIGHTS IF YOUR EMPLOYER IS INSOLVENT PL718 (Rev 7)
Redundancy
payments
If you were
dismissed on grounds of redundancy you may be entitled to a statutory
redundancy payment. One important condition for receiving a redundancy
payment is that you must have had at least two years' continuous
service with your employer since the age of eighteen. The amount
of your lump-sum redundancy payment depends on:
- how
long you have been continuously employed by your employer;
- how
your years of continuous service relate to a particular age
band; and
- your
weekly pay, up to a statutory limit.
For each complete
year of continuous service between the ages of 41 and 65 you will
receive 1½ weeks' pay. However if you are over 64 the
total amount of the payment you receive will be reduced - see
below.
For each complete
year of continuous service between the ages of 22 and 40, you
will receive one week's pay.
For each complete year of continuous service between the ages
of 18 and 21 you will receive half a week's pay.
Years of continuous service before the age of 18 do not count
for these purposes.
You
can use the ready reckoner to help you work
out your payment.
How
to work out your length of service
The maximum number of years' continuous service which can be counted
for statutory redundancy payments purposes is 20. We generally
count length of continuous service backwards from the "relevant
date" which is usually the date on which the notice given to you
ends - normally the date your job or employment contract ends.
But if your employer gives you less than the legal minimum notice
to which you are entitled, the extra notice which you should have
received is added on. If under your contract of employment you
were entitled to a longer period of notice, and you received this
notice but did not work it, the date up to which your continuous
service is counted may be later still.
Certain absences - for example, caused by sickness, pregnancy
or temporary shortage of work - can count towards continuous service
even if your contract of employment was suspended.
When working out your continuous service for a redundancy payment
remember that days lost through industrial disputes do not count
(although they do not actually break the continuous service).
Any
days you were on strike will be taken away from your total length
of service.
What
'a week's pay' means
The amount of a week's pay to be taken into account is the amount
you are entitled to under the terms of your contract of employment
on the 'calculation date'. This is:
a) the date on which your employer gave you the minimum notice
you are legally entitled to; or
b) the date on which your employer would have had to give you
the minimum statutory notice in order to end your employment on
the day it actually ended.
If you had normal working hours and your pay did not change, for
example with the amount of work you did, your week's pay is simply
your basic weekly wage or salary. Overtime earnings are not included
unless overtime was part of your normal working hours.
If your earnings changed from one week to another because of piecework
or productivity bonus arrangements but you still had normal working
hours, your week's pay is worked out by multiplying the number
of hours you normally worked in a week by your average hourly
earnings over the 12 complete weeks of work before the calculation
date. Only hours actually worked are taken into account in calculating
this average. If the hours used in the calculation include hours
paid at higher rates, the higher rate is ignored and the hours
are worked out at the normal basic rate.
If your normal working hours varied from week to week because
of shift work, and your earnings varied as a result, a similar
calculation is done, but the average hourly earnings are multiplied
by the average weekly hours over the same 12 weeks.
If you had no normal working hours, your week's pay will be your
average weekly earnings in the 12 weeks before the calculation
date. If you are not sure read the document Continuous employment and a week's pay:
rules for calculation (PL711) .
There is a limit on the amount of a week's pay which we can take
into account in working out your entitlement. The limit is
reviewed each year and is £260 from 1 February 2003.
If
you are aged 64 or over
If you are aged 64 or over, your redundancy payment will be reduced
by one twelfth for each complete month you are over 64. This means
that if you are 65 or over you will not be entitled to any payment.
Employment
tribunals
You can complain
to an employment tribunal if we have refused you a payment which
you think you should have, or if you think you have received less
than you should. You can get an application form
(IT1) from any
Jobcentre Plus office. You should return it within
three months of when the payment was refused or not made in full
(or six months in the case of a statutory redundancy payment).
When you fill in the application form, please write the following
in the 'respondent' box:
The Secretary of State for Trade and Industry,
Redundancy
Payments Office
(address of office which dealt with your claim).
Ready reckoner for calculating the number
of weeks' pay due.
|
