A key step in a fair redundancy process is giving those employees selected for redundancy the correct notice. How much redundancy notice an employee must be given depends on various factors, including how long they have worked for you and whether their entitlement is contractual or statutory.
Our expert HR Advisors specialise in supporting small business around the UK with their HR and employment law issues, including redundancy procedures. We will ensure your redundancy process is fair and lawful, thereby significantly reducing the chances of unfair dismissal claims.
Call us now on 01491 598 600 or email us on cw@gaphr.co.uk and we will be delighted to help you.
How Much Redundancy Notice Must An Employer Give Under An Employment Contract?
Your first port of call when ascertaining how much redundancy notice an employee requires is their contract of employment. If the contract contains terms governing redundancy notice periods, you must adhere to them.
How Much Redundancy Notice Must An Employer Give By Law?
If the contract of employment does not stipulate how much redundancy notice the employee is entitled to, the statutory redundancy notice periods will kick in.
How much statutory redundancy notice an employee must be given depends on how long they have worked for you. The relevant periods are as follows:
- At least one week’s notice for employees who have worked for you for between one month and two years.
- One week’s notice for each year for employees who have worked for you for between two and twelve years,
- Twelve weeks’ notice for employees who have worked for you for twelve years or more.
What Are Payments In Lieu Of Notice And When Can Employers Use Them?
If you would prefer an employee to leave immediately and not work their notice period, you can offer them ‘payment in lieu of notice’. This could be appropriate if you are concerned that the employee’s ongoing presence in the workplace may affect morale or disrupt your other employees.
The employee’s contract of employment may expressly allow payments in lieu of notice. If it does, it should set out how the payment must be calculated. Often, contracts of employment only entitle employees to the basic pay they would have received during their notice period, excluding any benefits such as pension contributions and bonuses.
If the employee’s contract of employment does not provide for payments in lieu of notice, you can only proceed with the course of action if the employee specifically agrees to it. Offering to pay benefits as well as the basic salary can sometimes encourage reluctant employees to accept the lump sum and move on.
How Much Notice Pay Must Employers Pay To Redundant Employees?
You must pay a redundant employee through their notice period. Notice pay is based on the employee’s average earnings over the twelve weeks prior to their notice period starting.
Notice pay is distinct from redundancy pay and is payable in addition. All employees are entitled to statutory redundancy pay if they have worked for you for two years or more. Employees might be eligible for enhanced redundancy pay under their contracts of employment, so checking the provisions of the relevant contract is essential.
Statutory redundancy pay is calculated according to the employee’s age and length of service, as follows:
- Half a week’s pay for each year the employee worked for you under the age of 22.
- One week’s pay for each year the employee worked for you between the ages of 22 and 41.
- One and a half week’s pay for each year the employee worked for you aged 41 or over.
Statutory redundancy pay is currently capped at £700 a week regardless of the employee’s actual income. Furthermore, the length of service for which they can claim redundancy pay is capped at 20 years. Accordingly, at present, an employer’s maximum redundancy pay obligation is £21,000.
What Should An Employer Communicate To The Employee Regarding Redundancy Notice?
Once you have served a notice of termination on the selected employee, it’s good practice to send a follow up letter detailing the logistics of their dismissal, including their notice period.
Examples of the types of information your letter should contain include the following:
- When their notice period begins and how long it will last.
- How you calculated their notice period.
- When their notice period will end.
- Whether the employee will serve their notice period or receive payment in lieu of notice.
- How you will calculate their notice pay.
- If they are working their notice, how their notice pay will be calculated.
- If they are receiving a payment in lieu of notice, how you have calculated the lump sum.
Can You Change Your Mind After Giving A Redundant Employee Notice?
Once you have given an employee notice, you can only withdraw it with their agreement.
Call us now on 01491 598 600 or email us on cw@gaphr.co.uk and we will be delighted to help you.
