Redundancy Pay and Unfair Redundancy
How statutory redundancy pay is calculated under the Employment Rights Act 1996, and when a genuine redundancy can still be an unfair dismissal.
Two different questions
A redundancy dispute usually splits into two separate questions that are easy to confuse:
- Was the statutory redundancy payment correct? This is a calculation question under the Employment Rights Act 1996.
- Was the dismissal fair? A genuine redundancy can still be an unfair dismissal if the process was wrong.
What redundancy legally means
Section 139 of the Employment Rights Act 1996 defines redundancy: broadly, the business or workplace is closing, or the need for employees to do work of a particular kind has ceased or diminished. If the real reason for the dismissal is something else, calling it “redundancy” does not make it one.
How statutory redundancy pay is calculated
Statutory redundancy pay generally applies to employees with at least two years’ continuous service. It is worked out from completed years of service, your age in each of those years, and a week’s pay:
- 0.5 week’s pay for each full year you were under 22.
- 1 week’s pay for each full year you were 22 to 40.
- 1.5 weeks’ pay for each full year you were 41 or over.
Service counts up to a maximum of 20 years, and a week’s pay is capped at the statutory limit in force at the relevant date. The cap is updated periodically, so always check the current published figure on GOV.UK before relying on a number.
When a genuine redundancy is still unfair
- Unfair selection: selection criteria that are discriminatory, applied inconsistently, or based on something like sickness absence tied to a disability.
- No proper consultation: individual consultation is expected; collective consultation obligations arise where 20 or more roles are proposed for redundancy within 90 days.
- No consideration of alternatives: failure to look for suitable alternative employment.
- A sham: a “redundancy” used to remove a specific person.
Where any of these apply, the route is usually an unfair dismissal claim, separate from the redundancy-pay calculation.
Facts to organise
- Start date, dismissal date, age, and gross weekly pay.
- The redundancy pool, the selection criteria, and your scores.
- Consultation meetings: dates, who attended, what was said.
- Any alternative roles offered or not offered.
- The redundancy payment you received and how it was calculated.
Time limits and ACAS
Notify ACAS for early conciliation before an ET1. Tribunal claims are generally subject to a three-month-less-one-day limit; see ACAS and time limits.
How TribunalKit supports this draft
If your issue is unfair selection or process, TribunalKit’s unfair dismissal builder asks structured questions about the pool, criteria, consultation, and alternatives, and produces a source-linked draft that traces back to your answers. You review the accuracy and filing position before use.
Product page: TribunalKit unfair dismissal builder. For pay owed on termination, see unpaid wages and unlawful deductions.
FAQ
Who is entitled to statutory redundancy pay?+
Employees with at least two years' continuous service who are dismissed by reason of redundancy are generally entitled to a statutory redundancy payment under the Employment Rights Act 1996.
How is statutory redundancy pay calculated?+
It is based on completed years of service, age in each year, and a week's pay. The bands are 0.5 week per year under age 22, 1 week per year for ages 22 to 40, and 1.5 weeks per year for age 41 and over. Service is capped at 20 years and a week's pay is capped at the current statutory limit.
Can a redundancy still be unfair?+
Yes. Even where a genuine redundancy situation exists, the dismissal can be unfair if the selection was unfair, there was no proper consultation, or suitable alternative employment was not considered. That is an unfair dismissal claim.
Is there a time limit?+
Employment Tribunal claims are generally subject to a three-month-less-one-day limit, and you must start ACAS early conciliation first. Time limits for a redundancy payment claim and an unfair dismissal claim should each be checked against your dismissal date.
Can TribunalKit tell me if my redundancy was unfair?+
No. TribunalKit organises a draft from your facts. It does not assess merits, decide fairness, or provide legal advice.