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Notice pay in the UK
If you are made redundant, your employer usually has to give you notice or pay you in lieu of notice. The amount depends on your contract and your length of service. You are entitled to at least the statutory minimum notice.
The legal minimum is one week’s notice if you have worked for your employer for at least one month, two weeks if you have worked for two years, and then one extra week for each full year of service after that. The maximum statutory notice is 12 weeks. Your contract may give you more.
Redundancy pay entitlement
You may be entitled to statutory redundancy pay if you have been continuously employed for at least two years. This applies if your role is no longer needed, rather than if you are dismissed for misconduct or performance issues. Redundancy pay is separate from notice pay.
The amount is based on your age, weekly pay, and length of service. It is calculated using a set formula, with different rates for different age bands. There is also a cap on weekly pay used in the calculation, which changes each year.
How redundancy pay is calculated
For each full year you have worked, you get 0.5 week’s pay for each year under age 22, one week’s pay for each year aged 22 to 40, and 1.5 weeks’ pay for each year aged 41 or over. Only a limited number of years can count. The current legal cap on service is 20 years.
Your weekly pay is also subject to a statutory maximum. If you earn more than the cap, your redundancy pay will still be calculated using the capped amount. Employers can choose to offer an enhanced redundancy package, but they do not have to.
What if your contract is better than the legal minimum?
Your employment contract may give you more notice or a more generous redundancy payment than the statutory minimum. If so, the contract terms usually apply. It is worth checking your contract, staff handbook, and any redundancy policy.
If your employer promises an enhanced package, it should set out the terms clearly. Some employers use settlement agreements during redundancy, which may include additional money in exchange for you agreeing not to bring certain claims. These should be reviewed carefully.
Other rights to check
Redundancy can also affect other payments, such as outstanding holiday pay, bonuses, and any wages owed up to your leaving date. You may be able to claim notice pay even if your employer offers redundancy pay. The two are not the same.
If you think your redundancy has been handled unfairly, or you are unsure what you are owed, you can seek advice from ACAS, a trade union, or an employment solicitor. Time limits for bringing claims can be short, so it is sensible to act quickly.
Frequently Asked Questions
Notice and redundancy pay entitlement UK refers to the legal rights an employee may have when their job ends, including either being given notice before termination or pay in lieu of notice, and separate redundancy pay if they qualify under UK law.
Eligibility for notice and redundancy pay entitlement UK depends on employment status, length of service, and the reason for dismissal. Employees are generally entitled to notice pay, and redundancy pay may apply if they have at least 2 years of continuous service and are dismissed because their role is genuinely redundant.
Under notice and redundancy pay entitlement UK, the statutory minimum notice is 1 week after 1 month of service, 2 weeks after 2 years, and then 1 additional week for each full year of service up to a maximum of 12 weeks, unless the contract provides more.
Redundancy pay under notice and redundancy pay entitlement UK is based on age, length of continuous service, and weekly gross pay, using the statutory formula for eligible employees. There is also a statutory weekly pay cap, which can change each year.
Notice pay under notice and redundancy pay entitlement UK compensates for the notice period when employment ends, while redundancy pay is a separate payment for losing a job because the role is no longer needed. An employee may be entitled to one or both, depending on the circumstances.
Yes. Under notice and redundancy pay entitlement UK, an employer may make a payment in lieu of notice if the contract allows it or if the employer chooses to end employment immediately and pay the equivalent notice amount.
Usually not for redundancy pay, because redundancy requires the job itself to be redundant. Notice pay may still be due under notice and redundancy pay entitlement UK unless the dismissal is for gross misconduct or another reason that lawfully removes notice entitlement.
Coverage under notice and redundancy pay entitlement UK depends on worker status, not just the contract label. Some zero-hours workers may be employees and may qualify for notice rights or redundancy pay if they meet the legal tests and service requirements.
Yes, fixed-term employees can be covered by notice and redundancy pay entitlement UK. If the fixed-term contract ends early, notice rights may apply; if the work ends because the role is redundant and the employee qualifies, redundancy pay may also be due.
Under notice and redundancy pay entitlement UK, normal wages and notice pay are usually subject to tax and National Insurance. Statutory redundancy pay can often be paid tax-free up to the relevant limit, but amounts above that may be taxable.
Notice rights under notice and redundancy pay entitlement UK may still apply during probation if the employee has the required service or the contract gives a notice period. Statutory redundancy pay usually does not apply during probation because the employee normally will not have 2 years of service.
Yes. An employer and employee can agree enhanced terms that are better than the minimum notice and redundancy pay entitlement UK. Many employers offer contractual or enhanced redundancy packages beyond the statutory minimum.
If an employer fails to pay notice and redundancy pay entitlement UK, the employee may be able to raise a grievance, file a tribunal claim, or seek legal advice. Time limits can apply, so it is important to act promptly.
Holiday pay is separate from notice and redundancy pay entitlement UK, but any untaken accrued holiday should usually be paid when employment ends. It is normally added to the final settlement alongside notice pay or redundancy pay if due.
Yes. Notice and redundancy pay entitlement UK depends heavily on the reason employment ends. Redundancy pay is only due where the dismissal is genuinely by reason of redundancy, while notice pay may be due in many forms of termination unless an exception applies.
Finding another job does not usually remove an employee's right to notice and redundancy pay entitlement UK once those rights have arisen. Redundancy pay is based on eligibility at the point of termination, not on whether the person later gets re-employed.
Agency workers may have limited rights under notice and redundancy pay entitlement UK, depending on whether they are classified as employees, workers, or self-employed, and on the terms of their assignment and contract. Their legal status needs to be checked carefully.
The maximum statutory redundancy pay under notice and redundancy pay entitlement UK depends on the statutory weekly pay cap and the employee's age and length of service. The overall amount is limited by law and is reviewed periodically.
Yes, some notice and redundancy pay entitlement UK claims can be made if the employer is insolvent, but the claim process may involve the Insolvency Service or the redundancy payments scheme. There are specific procedures and limits that apply.
An employee can check notice and redundancy pay entitlement UK through their employment contract, the ACAS guidance, GOV.UK resources, or by getting advice from an employment lawyer or union representative if the situation is disputed.
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