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Redundancy Payments


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An employee who is dismissed by reason of redundancy will be entitled to a statutory redundancy payment from his employer (s 163 Employment Rights Act 1996), although the contract of employment may provide for more generous payments.

A redundancy payment aims to reward an employee for past employment, and so any new employment that the employee finds will not affect the redundancy payment.

Employees must have had at least two years continuous employment before they are eligible to claim a redundancy payment.

The definition of redundancy is contained in s 139(1) of the Employment Rights Act 1996 and says:

An employee who is dismissed shall be taken to be dismissed by reason of redundancy if the dismissal is wholly or mainly attributable to:

(a) the fact that his employer has ceased or intends to cease-

(i) to carry on a business for the purposes of which the employee was employed by him, or

(ii) to carry on that business in the place where the employee was so employed, or

(b) the fact that the requirements of that business-

(i) for employees to carry out work of a particular kind, or

(ii) for employees to carry out work of a particular kind in the place where the employee was employed by the employer,

have ceased or diminished or are expected to cease or diminish.

Corinne Day is a trainee solicitor who specialises in information technology law and intellectual property law. She can be contacted via e-mail on

About the Author

Lawdit Solicitors offer services and advice for litigation, commercial contracts, Intellectual Property and IT legal agreements. We are experts in commercial law with a heavy emphasis on Intellectual Property, Internet and e-commerce law. Lawdit is a member of the International Trademark Association, the Solicitors' Association of Higher Court Advocates and we are the appointed Solicitors to the largest webdesign association in the world, the United Kingdom Website Designers Association.

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Article Published/Sorted/Amended on Scopulus 2009-03-08 14:59:00 in Legal Articles

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