Redundancy payment meaning

Preparatory steps Secure the employee’s most recent employment contract, together with any variations, related correspondence forming part of the contract, and any company handbook considered contractual Verify the employee’s continuous service particulars, including the employment start date and the dates of any contract amendments during employment Gather pension details: whether the scheme is defined benefit or defined contribution, and whether all employer contributions are fully up to date Identify the basis for the settlement-e.g., in respect of a Workplace Relations Commission (WRC) claim, a redundancy payment, a personal injury claim, or another legal claim Where multiple claims are being resolved, ensure agreement with the employer on how the overall settlement is apportioned to each claim, and that both parties clearly understand the tax treatment of each amount Ascertain any shares or share option schemes held by the employee, paying close attention to any definitions relating to leaver status that apply...

Although ministers insist the bill is “firmly pro-business and pro-worker”, the latest changes have yielded a final version that further ramps up the financial pressures on employers under the Labour government. Sanctions for employers who breach collective redundancy procedures will be doubled, and the Central Arbitration Committee will gain the power to levy fines on businesses that obstruct union access to the workplace. Statutory sick pay will apply to every single worker from the first day of illness, yet there is no indication of a revival of the rebate scheme the government once ran for small and medium-sized businesses and firms. A reduced payment is also presently available to individuals earning below the 2024 threshold of £116.75 per week. MPs are also expected to insert a right to a fortnight of bereavement leave for parents following a miscarriage when the ERB reaches its third reading in the House of Commons next week. On 5 March 2025, Dan Pollard, a partner at Charles Russell Speechlys LLP, described the amendments as “brilliant...

In this issue: Horizon scanning Taxation Prohibited behaviour (discrimination, etc) Equality and the gender pay gap Maternity, parenting and carers Whistleblowing Data protection and workforce information Financial services and banking—employment matters Unfair dismissal Redundancy Employment Tribunals Northern Ireland New and refreshed content Dates for your calendar Trackers New Q&As Employment resources on Lexis+® Daily and weekly news briefings Horizon scanning Webinar: Employment Rights Bill—What’s in store for employers? We recently convened an engaging webinar examining several of the most significant reforms within the Employment Rights Bill (ERB). Cathy Hoar, a professional support lawyer in the Lexis+ UK Employment team, was joined by Stephen Ratcliffe, a partner in the Employment and Compensation team at Baker & McKenzie. Together, Cathy and Stephen explored what is presently known about the proposals, referring to the ERB itself and materials such as the government’s Next Steps to Make Work Pay...

In this issue: Horizon scanning Public sector Pay Benefits Tax Protected characteristics Maternity, parents, and carers Corporate governance Financial services and banking: employment issues Bribery, modern slavery, tax evasion and fraud Settlement Employment Tribunals Northern Ireland Dates for your diary Trackers New Q&As Employment resources on Lexis+® Daily and weekly news alerts Horizon scanning RPC publishes red-rated opinion on Employment Rights Bill Impact Assessments The Regulatory Policy Committee has issued its view on the Employment Rights Bill’s Impact Assessments, rating them not fit for purpose. The Bill, which intends to revise employment rights, redundancy procedures and labour market enforcement, was examined via a summary IA and 23 standalone IAs. Eight of those individual assessments were found wanting, with six in the highest impact bracket. The RPC advises adding broader macro-economic analysis and stronger evidence for the case for intervention, the selection of options, and the...

ARCHIVED: This Practice Note is archived and not being maintained. It reviews the Employment Rights Act 1996 (Coronavirus, Calculation of a Week’s Pay) Regulations 2020 (Week’s Pay Amendment Regs 2020), SI 2020/814, which ensure that employees furloughed under the Coronavirus Job Retention Scheme (CJRS) for any period ending on or before 30 September 2021 receive statutory redundancy pay, statutory notice pay and other entitlements by reference to their usual earnings rather than the reduced furlough rate. For details on the Coronavirus Job Retention Scheme (CJRS), extended to 30 September 2021, see Practice Note: Coronavirus Job Retention Scheme (extended version 1 May to 30 September 2021) [Archived]. For general guidance on working out a week’s pay under sections 221–224 of the Employment Rights Act 1996 (ERA 1996), see Practice Note: Calculating a week’s pay. The Employment Rights Act 1996 (Coronavirus, Calculation of a Week’s Pay) Regulations 2020 (Week’s Pay Amendment Regs 2020), SI 2020/814, which took effect on 31 July 2020, prescribe how a week’s pay is to...

Employment laws in the Republic of Ireland, Great Britain and Northern Ireland have much in common, as all operate within common law systems and many contemporary employment statutes flow from European Directives. Even so, divergences do exist and are likely to widen. This Practice Note outlines several distinctions between Great Britain and the Republic of Ireland. Care is advised when handling matters in Northern Ireland, where the framework is becoming increasingly distinct from Great Britain. For details on the differences between Great Britain and Northern Ireland, see Practice Note: Northern Ireland employment law. Main areas of difference employment status categories leave entitlements qualifying period and remedies under unfair dismissals legislation redundancy entitlements protected conversations and settlement agreements employment tribunal procedures transfers of undertakings (TUPE) immigration Categories of employment status In the Republic of Ireland, individuals engaged in work are typically classified as either ‘employees’ or ‘independent contractors’. There is no...

This Practice Note considers the practical matters that commonly arise in connection with an employment settlement agreement (previously referred to as a compromise agreement). It also highlights the likely tax considerations and signposts our related Practice Notes for fuller guidance. For details of the legal requirements (that is, the conditions governing settlement agreements) that must be satisfied for an agreement to be binding and effective to compromise statutory employment claims, see Practice Note: Settlement agreements in employment—legal requirements Parties to the agreement Where the employer is an individual, or a company with a straightforward corporate set-up, the parties to the settlement agreement will be the employer and the employee, with no necessity to mention third parties. However, the identity of the employing entity may not be simple, eg within a more complex group structure where: the employee works, or has worked, for other companies in the employer’s group, eg on secondment the employee performs their duties for one company but is paid by another...

This Agreement is made on [ insert date ] Parties [ Insert Employer’s name ], whose registered office is at [ insert Employer’s address ], company registration number [ insert Employer’s company number ] (Employer); [ Insert Employee’s name ] of [ insert Employee’s address ] (you). The parties agree: Termination of employment 1.1 Your employment with the Employer [ will terminate OR terminated ] owing to [ insert reason for termination ] on [ insert date ] (Termination Date). 1.2 For the period up to and including the Termination Date, you [ will be OR have been ] paid your accrued basic salary (less deductions for income tax and primary class 1 (employee) National Insurance contributions ( PAYE Deductions )) and [ will have OR have ] received your contractual benefits [ , including a payment of £[ insert amount ] in respect of [ insert number ] days’ accrued but untaken holiday entitlement ] [...

Insert in para 6.1 of response form ET3: It is [ accepted OR not accepted OR denied ] that the Claimant was employed by the Respondent [ at its [ insert details, eg London office ] ] as [ insert job title, eg an electrician ] from [ insert date ] until [ his OR her OR their ] dismissal on [ insert date ]. It is [ accepted OR denied ] that the Respondent is [ insert brief description of the nature of the Respondent, eg a nationwide property maintenance service ]. For the reasons set out below, the Respondent denies that the Claimant was unfairly [ and/or wrongfully ] dismissed, as alleged or at all. [ It is further denied that the Respondent [ insert details of any other claims, eg automatically unfairly dismissed the Claimant under section 152 of the Trade Union and Labour Relations (Consolidation) Act 1992 (TULR(C)A 1992), automatically unfairly selected the Claimant for redundancy under section 153 of TULR(C)A 1992,...

[ Insert in para 8.2 of claim form ET1 ] The Claimant worked for the Respondent in the role of a [ insert job title, e.g. ‘lorry driver’ ] from [ insert start date of employment ] until [ his OR her OR their ] dismissal on [ insert date ] by reason of redundancy. On the date of dismissal, the Claimant was: 2.1 [ insert number ] years of age 2.2 paid £[ insert number ] per week (gross) [ Insert pertinent factual details explaining why the dismissal was for redundancy ]...

Employment Rights Act 1996 (Coronavirus, Calculation of a Week’s Pay) Regulations 2020 (Week’s Pay Amendment Regs 2020), SI 2020/814 For broader guidance on SI 2020/814, see Practice Note: Coronavirus Job Retention Scheme—right to statutory redundancy and other termination payments [Archived]. This resource provides general context on the Employment Rights Act 1996 (Coronavirus, Calculation of a Week’s Pay) Regulations 2020 and their application... The Week’s Pay Amendment Regs 2020, SI 2020/814, prescribe how to determine a week’s pay for an employee who is, or has previously been, furloughed under the CJRS. The rules apply when calculating specified payments, including an employee’s entitlement to payment under section 88 or 89 of the Employment Rights Act 1996 (ERA 1996). In effect, the instrument clarifies the approach to weekly pay where furlough is relevant, ensuring the correct basis is used for these statutory sums linked to notice or other termination-related payments as identified under the ERA 1996...

This Q&A reviews alternative employment for fair dismissal purposes and examines what counts as suitable alternative employment for statutory redundancy payment purposes. It addresses both fair dismissal and statutory redundancy payment considerations. Reason for dismissal The same definition of ‘redundancy’ is applied for the purposes of determining: the entitlement to a statutory redundancy payment whether, in the context of an unfair dismissal claim, the reason for dismissal is redundancy Under that definition, an employee is dismissed by reason of redundancy where the dismissal is wholly or mainly attributable to: the employer ceasing, or intending to cease, carrying on the business for the purpose for which the employee was employed by them the employer ceasing, or intending to cease, carrying on that business in the place where the employee was so employed the requirements of the business for employees to undertake work of a particular kind, either generally or in the place where the employee was employed,...

If an employee dismissed by reason of redundancy is invited to return to their former post, or to take up another position (with the same employer or an associated employer), and they resume work within four weeks of the previous employment ending, they are treated as not dismissed and have no entitlement to a redundancy payment (section 138(1) of the Employment Rights Act 1996 (ERA 1996)). For more detail, see Practice Note: Renewal of contract, re-engagement and trial periods. On whether an employee’s continuity of employment is preserved during the interval between the old role ending and the new role commencing in those circumstances, see, generally, the following Practice Notes: Continuity of employment How to determine continuity of employment Working out an employee’s period of continuous employment with an employer is relevant to qualifying for certain statutory rights under the Employment Rights Act 1996 (ERA 1996). There is a prescribed approach to calculating continuity that overrides any agreement between employer and...