What is redundancy? Redundancy is a form of dismissal. People are usually made redundant because their employer needs to reduce the workforce or because the job they do is no longer necessary. Redundancies often happen because an organisation is cutting costs and needs to reduce staff numbers, or because new systems or technology have made a job unnecessary. It could be because your job no longer exists or because the business is closing down or moving.

Usually, in order for a dismissal to be redundancy, your job role needs to have disappeared. It is not redundancy if your employer takes on a direct replacement immediately. All workers are protected from being sacked or chosen for redundancy unfairly by the Employment Rights Act 1996.

Will I qualify for a redundancy payment? If you’ve been working for your employer continuously for two years or more and you are made redundant, you are entitled to a lump sum payment. Check your employment contract as you might be entitled to other non-statutory payments as well.

To receive a payment, you must have been dismissed by your employer rather than have resigned. If your employer asks for volunteers for redundancy you will qualify for a payment if you volunteer, providing your employer accepts and actually dismisses you.

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If you have a fixed-term contract and it finishes without being renewed, this counts as a dismissal and you may be due a redundancy payment.

If you are made redundant, you may leave early by agreement with your employer and still be eligible for a payment. The minimum notice period which your employer has to give must have started by the time you give your notice.

How much will I get? Your redundancy payment depends on how long you have been working for your employer, your age, and your weekly pay, up to a legal limit. Redundancy pay is calculated as:

0.5 week’s pay for each year worked if you are aged under 22 in that year

1.0 week’s pay for each year worked if you are aged 22 or more, but younger than 41

1.5 week's pay for each year worked if you are 41 or older

Click here for a redundancy payment calculator to get an idea of how much you may be eligible to receive. This is based on the minimum payable, some employers will pay more - click here to find out how much more you may receive .

Some jobs are exempt from redundancy payments. These include: Some members of the Armed Forces, House of Lords and House of Commons staff, apprentices whose service ends at the end of their contract, employees on certain fixed term contracts who have given written agreement to waive their entitlement to a redundancy payment, domestic servants who are members of the employer's immediate close family, some fishermen, crown servants or employees in a public office and employees of the Government of an overseas territory.

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