Statutory redundancy notice periods dictate how much notice an employee selected for redundancy must be given before their employment with you ends. Understanding statutory redundancy notice periods and ensuring you adhere to them is crucial in following a proper redundancy process and avoiding Employment Tribunal claims.
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What Are Statutory Redundancy Notice Periods?
Statutory redundancy notice periods are the notice periods you must give to any employees selected for redundancy. If the employee’s contract of employment addresses the issue of notice, its provisions will take precedence over the statutory redundancy notice periods. Any contractual redundancy notice periods cannot be shorter than the statutory ones, but they can be longer. Accordingly, your first port of call should be to check the contract and any other relevant policy documentation to ensure you give the employee the correct redundancy notice period.
How Long Are Statutory Redundancy Notice Periods?
The statutory redundancy notice periods are as follows:
- For employees who have been employed for between one month and two years, the statutory redundancy notice period is one week.
- For employees who have been employed for between two and twelve years, the statutory redundancy notice period is one week for each year of their employment.
- For employees who have been employed for twelve years or more, the statutory redundancy notice period is twelve weeks.
What Are Your Obligations During An Employee’s Statutory Redundancy Notice Period?
You must let the employee know how long their notice period is and how you have calculated it. You should let the employee know when their notice period will start and end.
You must continue paying the employee throughout their statutory redundancy notice period. Notice pay is based on the employee’s average earnings over the 12 weeks leading up to the start of their notice period.
Are There Any Alternatives To Statutory Redundancy Notice?
You can end an employee’s employment without notice if their employment contract allows for ‘payment in lieu of notice’ or PILON as it is sometimes called. As the name suggests, PILON enables you to pay the employee a lump sum instead of giving them notice.
Even if the employee’s contract does not address PILON, you can still offer it if you wish. You might choose to do for a variety of reasons, such as if the employee might disrupt other staff members if they hang around to work their notice. The employee may accept your offer since they will receive a lump sum and can spend the time they would have been working their notice looking for alternative employment.
Payments in lieu of notice are based on what the employee would have earned had they worked their notice period, whether statutory or contractual. Unlike statutory redundancy pay, notice pay is not capped, but it is subject to income tax and National Insurance. Accordingly, when calculating the lump sum payable to an employee in lieu of notice, be sure to deduct any applicable taxes.
Can You Withdraw Statutory Redundancy Notice?
If your circumstances change and you no longer need to make the employee redundant, you might wish to withdraw their statutory redundancy notice. However, you can only do so if the employee agrees.
If the employee agrees to you withdrawing their statutory redundancy notice, they will simply continue working for you. You need not pay them any redundancy pay.
If the employee does not agree to you withdrawing their statutory redundancy notice, they will work their notice and leave your employment. However, you may not be obliged to pay them redundancy if you have offered to keep them in the same role with the same terms and conditions. If the job you are offering differs from the employee’s current one, whether you will be obliged to pay them redundancy depends on the suitability of the new role.
Whether the role you propose is suitable for the employee depends on several factors, including the following:
- How similar it is to the employee’s current role.
- The salary and benefits.
- How well suited the employee’s skills and experience are to the role.
- The job’s location.
The role you offer must start within four weeks of the employee’s current job ending. If it doesn’t, their situation will be classed as one of redundancy and you will still need to pay them redundancy, despite offering alternative employment.
Call us now on 01491 598 600 or email us on cw@gaphr.co.uk and we will be delighted to help you.
