Question 1

How is statutory redundancy pay calculated?

Accepted Answer

By a formula combining **age, length of service and weekly pay** — and the figure is frequently much lower than people expect, because each of the three inputs is capped or weighted.

**Who qualifies.** Employees with at least **two years' continuous service**. Workers and the genuinely self-employed do not qualify.

**The calculation.** For each complete year of service:

**Half a week's pay** for each year in which you were **under 22**.

**One week's pay** for each year aged **22 to 40**.

**One and a half weeks' pay** for each year aged **41 or over**.

**The three caps that reduce it:**

**A maximum of 20 years** of service counts, so longer service adds nothing.

**A statutory cap on a week's pay**, revised annually — so anyone earning above that has their weekly figure reduced to the cap, which for higher earners makes the statutory sum a small fraction of actual salary.

**Only complete years count.**

**Contractual or enhanced redundancy pay** is anything above this, entirely at the employer's discretion or as set out in a contract or collective agreement. **This is where the real money usually is**, and where it varies enormously.

**Tax treatment.** Genuine redundancy payments are tax-free up to a threshold; sums above it, and any payment in lieu of notice, are taxable.

**What else you are owed:** notice pay or worked notice, accrued untaken holiday, and any contractual entitlements.

**What can remove the entitlement:** unreasonably refusing a **suitable alternative role**, which is judged objectively on pay, status, location and skills — and a genuine trial period of four weeks is available without losing the right.

**What you should check:**

**That it is a genuine redundancy** — the role must have ceased or diminished. Replacing someone in the same role is not redundancy.

**That the process was fair**, including consultation, selection criteria and consideration of alternatives.

**Collective consultation obligations** apply where 20 or more are at risk at one establishment, with defined minimum periods.

General information, not legal advice.

Question 2

What is the difference between redundancy and dismissal?

Accepted Answer

Redundancy is a dismissal for a specific reason: the job is no longer needed. Dismissal generally refers to termination for a reason relating to you — conduct, capability, or another substantial

Question 3

What are your rights to sick pay?

Accepted Answer

Statutory Sick Pay is a legal minimum, paid by your employer, not a benefit from the state — and it is considerably less than most people assume, which is why the difference between statutory and

Question 4

How do maternity, paternity and shared parental leave work?

Accepted Answer

Three distinct entitlements with different lengths, different pay and different eligibility rules — and the interaction between them, particularly shared parental leave, is where most of the

Question 5

How does holiday entitlement actually work?

Accepted Answer

Almost everyone in work is entitled to a statutory minimum of 5.6 weeks' paid holiday a year — and the confusion comes from the fact that this is expressed in weeks, not days, which is what makes

Question 6

What happens if your employer goes insolvent and you are owed money?

Accepted Answer

You become a creditor — and the practical answer is that some of what you are owed is payable by a government scheme rather than depending on whether there is money left in the business, which is the

Question 7

What is the difference between an employee, a worker and self-employed?

Accepted Answer

In UK law these are three distinct employment statuses with sharply different rights, and what your contract calls you does not decide it — a tribunal looks at the reality of the arrangement.

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