The statutory redundancy ready reckoner (www.gov.uk/calculate-your-redundancy-pay) is very useful for employers and employees alike when calculating redundancy pay. There are, however, a few pointers that are worth considering when you are making your calculations:
- The statutory minimum notice period is relevant. This is the minimum amount of notice employees are entitled to receive as a matter of law. The employer generally has to give one week’s notice for each year of employment up to a maximum of 12 weeks after 12 years but there could be a longer period in the employee’s contract.
- If you make an employee redundant and pay them in lieu of notice then they can add on what would have been their statutory minimum notice period to the length of service used to calculate their redundancy pay. If this period of time would mean that they would tip over to an additional year of employment then this needs to be taken into account when looking at the redundancy payment due.
- In a similar way, if you are paying in lieu of notice you also need to take account of any birthdays which might take place between the date of redundancy and the date when the employee’s statutory notice entitlement would have expired. The relevant age to input into the redundancy calculator would be the higher age which would have been reached by the end of the statutory minimum notice period.
- If your employees do not have normal working hours so your calculation of a week’s pay is based on a 12 week average, remember that any weeks where the employee wasn’t paid must be discounted and you will need to look back further to put together 12 weeks to average.
Find out how we can help. Our partner, Jon Dunkley, heads the Wollens specialist Employment Department. Contact him today for an informal chat, without obligation on 01271 342268 or via email at [email protected].