Redundancy rights: consultation and redundancy pay

Your rights when redundancy looms

Being told your job is at risk is unsettling, and it is natural to worry about what happens next. UK law gives you clear protections, though. These fall into two main areas: how your employer must consult you, and what you are entitled to when you leave. For statutory redundancy pay, you normally need at least two years’ continuous service. Collective consultation rights can apply even if you have less service. Understanding the rules helps you ask the right questions and make sure you receive what you are owed.

Redundancy is a specific situation: your employer needs fewer people to do a particular job. It is not the same as being dismissed for misconduct or poor performance. If your role is genuinely redundant, your employer should follow a fair process, including meaningful individual consultation. That means meeting with you, listening to your ideas, and considering alternatives before confirming dismissal.

Collective consultation: when 20 or more are affected

If your employer proposes to make 20 or more employees redundant at one establishment within a 90-day period, they must consult appropriate representatives. These are usually trade union representatives, or elected employee representatives if there is no union. The consultation must be meaningful and aim to reach agreement. It should cover ways to avoid redundancies, reduce the number, and soften the impact.

The minimum consultation periods are strict. For 20 to 99 redundancies, your employer must start consulting at least 30 days before the first dismissal. For 100 or more, the period is 45 days. They must also notify the government’s Insolvency Service using form HR1. If they fail to consult properly, an employment tribunal can order a protective award of up to 90 days’ pay per affected employee. That is a serious penalty, so employers usually take these rules seriously.

• 20 to 99 redundancies: 30 days’ minimum consultation.
• 100 or more redundancies: 45 days’ minimum consultation.
• Who counts: employees at the same establishment, not the whole company.
• Representatives: union reps or elected employee reps.

Notice periods: working out your entitlement

If you are dismissed by reason of redundancy, you are entitled to notice. Your contract may give you more, but the statutory minimum is based on your length of service. After one month and up to two years, you get at least one week’s notice. After that, you get one week for each complete year of service, up to a maximum of 12 weeks. So someone with five years’ service is entitled to five weeks’ notice.

Your employer can ask you to work your notice, or they may pay you in lieu of notice instead. If they dismiss you without notice and your contract does not allow payment in lieu, they must still pay you for the notice period. Notice pay is taxable and subject to National Insurance. It is separate from redundancy pay, so make sure you check both are correct.

How statutory redundancy pay is calculated

Statutory redundancy pay is based on three things: your age, your weekly pay, and your complete years of service. You must have at least two years’ continuous service to qualify. Only complete years count, and the maximum is 20 years. Your weekly pay is capped at £700 (the current statutory limit). Anything above that is not used in the calculation.

The age multipliers work as follows:

• Under 22: half a week’s pay for each year.
• 22 to 40: one week’s pay for each year.
• 41 and over: one and a half weeks’ pay for each year.

For example, if you are 45, have 10 complete years’ service, and your weekly pay is £500, you get 10 × 1.5 × £500 = £7,500. The maximum statutory redundancy pay is currently £21,000. Redundancy pay is tax-free up to £30,000. Your employer may offer an enhanced package, but they cannot pay you less than the statutory minimum if you qualify.

Practical steps and other protections

During your notice period, you have the right to reasonable time off to look for work or arrange training. This is paid at your normal rate for up to 40% of your remaining notice time. If you are not allowed this, you can claim the pay at an employment tribunal. You can also ask your employer for a written statement showing how your redundancy pay was calculated.

If you believe the redundancy selection was unfair, or the process was flawed, you may be able to claim unfair dismissal. Keep copies of emails, meeting notes, and any selection criteria. ACAS can offer free early conciliation if you decide to take a claim further. Most importantly, do not rush. Ask questions, get the figures in writing, and seek independent advice if anything feels wrong. You have rights, and knowing them puts you in a stronger position.