Redundancy pay entitlement

Redundancy notice pay

If you are made redundant, you will be entitled to, at the very least, (as long as you have worked there for a month) one week's notice period. How long your notice period is will depend on either what is written in your contact or how long you have worked for the company. The legal minimum notice period is as follows:

• One month - two years of employment - one week’s notice
• Two years - 11 full years of employment - one weeks’ notice for every full year you have worked
• 12 years or more - 12 weeks’ notice

Generally, it is up to your employer if they want you to work your notice; however, if they don't wish you to, then this can pan out in two different ways:

Payment in lieu of notice

This is when you are given a lump sum for your notice period and your employment is terminated straightaway. Also known as PILON, this option may mean, subject to post-termination restrictions, that you may be able to start a new job straight away.

Garden leave

If your employer offers you garden leave, also called gardening leave, then you generally won’t have to come into work, but you are still considered an employee of the company and must adhere to all of your contractual obligations. This means you can’t start a new job until your garden leave comes to an end. You can, however, look for and secure a new role. Depending on your contract or settlement agreement, you may be subject to restrictive covenants, that put restrictions on who you can work for, for a set period of time. 

Settlement agreements

Depending on the reasons behind the redundancy, you may be offered a settlement agreement. This could mean you are offered more than the statutory minimum. Any compensation payments offered in such an agreement will only be subject to tax if the total amount is over £30,000. Before signing a settlement agreement for redundancy, you will need to seek legal advice from a qualified solicitor or an authorised representative of a trade union for it to be legally binding. Read our guide to settlement agreements here.

If you need legal advice on whether you are receiving a fair redundancy package or if you think your redundancy was unfair, then contact our experienced redundancy solicitors today on 0161 696 6170.