Employment Rights Guide

Redundancy Rights: What You Need to Know

Your complete guide to redundancy pay, consultation, and settlement agreements

What is Genuine Redundancy?

Redundancy occurs when your employer needs to reduce the workforce. Genuine redundancy situations include:

  • The business is closing down completely
  • The workplace is closing or relocating
  • The business needs fewer employees to do work of a particular kind
  • Restructuring means your role no longer exists

Your Statutory Rights

If you've been employed for 2+ years, you're entitled to:

Statutory Redundancy Pay

  • • Half a week's pay for each full year you were under 22
  • • One week's pay for each full year you were 22–40
  • • 1.5 weeks' pay for each full year you were 41+
  • • Maximum 20 years service counts
  • • Weekly pay capped at £700 (2024/25)

Notice Period

  • • At least 1 week if employed 1 month – 2 years
  • • 1 week for each year employed (2–12 years)
  • • 12 weeks if employed 12+ years
  • • Check your contract – may be more generous

Fair Redundancy Process

Your employer must follow a fair process, which typically includes:

1

Consultation

Individual consultation to discuss the redundancy, alternatives, and selection criteria

2

Selection Criteria

Fair and objective criteria applied consistently (not based on protected characteristics)

3

Alternative Employment

Consideration of suitable alternative roles within the organisation

4

Right to Appeal

Opportunity to appeal the redundancy decision

Settlement Agreements in Redundancy

Many employers offer enhanced redundancy packages through settlement agreements. These often include:

  • Enhanced redundancy pay above statutory minimum
  • Payment in lieu of notice (PILON)
  • Ex-gratia payments (potentially tax-free up to £30,000)
  • Continuation of benefits (healthcare, company car)
  • Agreed reference wording
  • Legal fees contribution for advice
  • Outplacement support

When Redundancy May Be Unfair

Watch out for these warning signs that your redundancy may not be genuine:

  • • Your role is being filled by someone else (especially at lower pay)
  • • No proper consultation took place
  • • Selection criteria were subjective or discriminatory
  • • Alternative roles weren't genuinely considered
  • • The process seemed rushed or predetermined
  • • Only certain groups (age, gender, etc.) were affected

Been Offered a Redundancy Settlement Agreement?

We specialise in reviewing redundancy settlement agreements. We'll ensure you're getting a fair deal and that your employer is meeting all their legal obligations. Free to you—your employer pays.

Get Your Free Review