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Redundancy payouts in the UK follow specific computations. If you have been made redundant and you have been working continuously for an employer for at least two years, the payout calculation would be as follows: half of a week's pay for every year of continuous employment if you are younger than 22 years old; a week's pay for every year of continuous employment if you are between 22 and 40 years old; and 1.5 week's pay for every year of continuous employment if you are older than 41 years old.
As you try to understand more about redundancy payouts, you might have asked your self, 'What does a 'week's pay' mean?' The phrase refers to the monetary amount you would receive under your employment contract terms. Such provisions of your contract could be written, spoken, implied, or a combination of the three. You should have at least received a statement of the details at the start of the employment or within two months following your employment.
Your week's pay is your basic weekly salary or wage if you have been working regular hours and your pay has not changed on a weekly basis. Overtime earnings would not be added unless the overtime was included in the normal weekly routine.
The pay is averaged over 12 weeks prior to the date of calculation. Every February of the year, the maximum statutory limit is reviewed for any appropriate and timely adjustment. Employers are required to pay the rate set by the government, though they could opt to pay more.
If you work in shifts, there would be necessary adjustments to the computation of your redundancy payouts. If the normal hours of work vary weekly due to work shifts and your overall earnings vary as a result, the same calculation is carried out but this time, the earnings per hour are multiplied by average weekly hours over 12 weeks. If there is no fixed hour, the week's pay would be the average weekly earnings 12 weeks before the date of the calculation.
In case earnings have been changing weekly due to productivity bonus arrangements, the week's pay is computed by multiplying the number of hours when you normally worked within a week by the average hourly earnings over 12 complete weeks prior to the date of calculation. Take note that only hours that have been actually worked are accounted.
You do not need to work certain amount of working hours to qualify for redundancy payouts. Employees are entitled to redundancy payouts as long as they have worked at least two years continuously for the same employer.
Employers could offer to pay higher than the actual redundancy payouts. That is if employees would get into a compromise agreement. The document would take away employees' rights to file for any other claim regarding employment and redundancy in the future. If you decide to accept such an agreement, you must hire a reliable employment solicitor to provide you legal guidance. The employment law specialist could also provide additional insights about redundancy payouts and other related concerns.
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This is a resource for compromise agreement information specific for UK Law. For more information from compromise agreement solicitors please visit our website www.ukcompromiseagreements.co.uk.
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