When should I receive my redundancy payment?

Missing a redundancy payment deadline could cost you thousands in lost entitlements. With UK employers continuing to make redundancies in 2024, understanding exactly when you should be paid – and when you must act – is critical. This guide walks you through every crucial timing requirement to protect your rights. While many aspects of redundancy payments follow standard timeframes, complex situations may require early legal guidance to ensure you don’t miss out.

Read on for a complete timeline of when you should be paid and exactly when you need to act.

When does the redundancy payment process start?

Redundancy typically arises when a position becomes redundant due to company restructuring, site closures, or reduced demand for staff. The process follows strict legal timeframes to protect both employer and employee rights:

Initial consultation

Your employer must begin consultations with affected employees within specific legally mandated timeframes:

• For 20-99 employees: A minimum of 30 days before dismissals.
• For 100+ employees: A minimum of 45 days before dismissals.
• For individual redundancies: No fixed period, but the consultation must be ‘reasonable.’

Notice period

Once consultation ends and redundancy is confirmed, your official notice period begins with set durations based on your employment length:

• 1 week for each year worked.
• Capped at 12 weeks maximum.

Documentation requirements

Your employer must provide comprehensive written documentation outlining the redundancy terms and process. This documentation must arrive within 14 days of redundancy confirmation and should include:

• A timeline for the redundancy process.
• The anticipated payment date.
• A breakdown of payment calculations.
• Additional entitlements.

When are you eligible for redundancy pay?

You become eligible for statutory redundancy pay once you’ve worked continuously for your employer as an employee (not a contractor or freelancer). Your eligibility is determined by specific time-based criteria:

Service requirements

You must have worked for your current employer for at least 2 years to qualify:

• Continuous employment only.
• Part-time workers included.
• Includes any time on furlough, maternity, or paternity leave.

Age-related payment rates

Your age at the time of redundancy determines your payment rate:

• Under 22: Half a week’s pay per year served.
• 22-40: One week’s pay per year served.
• 41 and over: One and a half week’s pay per year served.

When must your employer pay you?

Your redundancy payment must legally be issued at a specific time. Understanding these payment deadlines helps ensure you receive your money when due.

Final payment deadline

Your employer must make your redundancy payment on either:

• Your last day of employment.
• Within 14 days of your employment ending.

Possible payment delays

Payment might be legitimately delayed only if:

• You’ve agreed to a different date in writing.
• Company is in administration (different rules apply).
• Payment plan has been agreed with tribunal.

When can you challenge the payment?

If you believe your redundancy payment is incorrect or hasn’t been paid, you must act within strict time limits to protect your rights.

Initial concerns

Raise concerns immediately if you spot any issues with:

• Payment calculation errors.
• Missing entitlements.
• Incorrect service dates.
• Wrong age-related rates.

Formal complaint steps

Follow these time-sensitive steps if initial concerns aren’t resolved:

• Send a formal letter to your employer within 7 days of identifying payment issues
• Wait 7-14 days for your employer’s response
• Contact ACAS if you don’t receive a satisfactory response
• Complete early conciliation before considering a tribunal claim

Tribunal time limits

You must submit your claim within 3 months minus one day from your last day of employment. Before submitting a claim, you must complete ACAS early conciliation. Your deadline may be extended while conciliation is ongoing.

When to seek legal support?

Getting expert legal advice early can protect your rights and ensure you receive your full redundancy payment entitlement.

Crucial times for legal advice

Consult a lawyer if:

• Your employer has missed payment deadlines.
• You suspect incorrect payment calculations.
• You’re under pressure to accept unfavourable terms.
• Your employer becomes insolvent.

Approaching deadlines

Legal support becomes vital when:

• Tribunal deadline is within 4 weeks.
• ACAS conciliation has failed.
• Settlement negotiations are stalled.

Complex situations

Seek immediate legal guidance if:

• Discrimination is suspected in your redundancy.
• Multiple types of payment are in dispute.
• Your employer contests your eligibility.
• You’re presented with a settlement agreement.

FAQs

1. How is my weekly pay calculated? Your weekly pay is based on your average wage over the 12 weeks before redundancy notice, currently capped at £700 (April 2024).
2. How many years of service count? Only complete years up to a maximum of 20 years count. For example, 5 years and 11 months counts as 5 years.
3. What’s my maximum payment? The statutory maximum is £21,000 (April 2024), though your contract might offer more. This is separate from notice pay and other entitlements.
4. What deductions apply? Statutory redundancy pay under £30,000 is tax-free and national insurance-free. Other termination payments may be taxable.

Facing redundancy is a challenging experience, but understanding your rights and timelines can protect your financial future. By following the step-by-step guide and seeking legal help when necessary, you can ensure that your redundancy payment process is as smooth and fair as possible. Remember, acting promptly at each stage is key to securing the payment and support you’re entitled to.

Need expert guidance on your redundancy payment?

Qredible connects you with expert employment lawyers who can review your payment rights, verify timeframes, and protect your interests throughout the redundancy process.

KEY TAKEAWAYS

1. Your redundancy consultation must legally start 30 days before dismissals for 20-99 employees, or 45 days for 100+ employees. This gives you protected time to understand and discuss the terms.
2. You qualify for statutory redundancy pay after two years of continuous employment. Payment rates depend on your age: half week’s pay (under 22), one week’s pay (22-40), or one and half week’s pay (41+), with weekly pay capped at £700 up to £21,000 (2024).
3. Your employer must pay you on your last day or an agreed date in writing, with full calculations provided within 14 days of employment ending.
4. If you need to challenge your payment, act quickly. You have ony three months from your last day to file a tribunal claim, after completing ACAS conciliation.
5. Seek legal advice immediately if payments are missed, calculations seem wrong, or your case involves discrimination or complex disputes.