What are my statutory rights if I am made redundant?

If you have been employed for 2 or more years, you are entitled to statutory redundancy pay (half a week's pay for each full year under 22, one week's pay for each full year aged 22 to 40, and 1.5 weeks' pay for each full year aged 41 or over, up to a maximum of 20 years' service with weekly pay capped at £700 for 2024/25). You are also entitled to a statutory notice period of at least 1 week per year of employment (up to 12 weeks). Your contract may provide more generous terms.

Employment Rights Guide

Redundancy Rights: What You Need to Know

Q: What is genuine redundancy?

Redundancy occurs when your employer needs to reduce the workforce. Genuine redundancy situations include: the business closing down completely, the workplace closing or relocating, the business needing fewer employees to do work of a particular kind, or restructuring that means your role no longer exists.

Q: What does a fair redundancy process look like?

Your employer must follow a fair process, which typically includes: individual consultation to discuss the redundancy, alternatives, and selection criteria; applying fair and objective selection criteria consistently (not based on protected characteristics); genuinely considering suitable alternative roles within the organisation; and giving you the opportunity to appeal the redundancy decision.

Q: What can a settlement agreement include in a redundancy situation?

Many employers offer enhanced redundancy packages through settlement agreements. These often include enhanced redundancy pay above the statutory minimum, payment in lieu of notice (PILON), ex-gratia payments (potentially tax-free up to £30,000), continuation of benefits such as healthcare or a company car, agreed reference wording, a legal fees contribution for advice, and outplacement support.

Q: When might a redundancy be unfair?

Your redundancy may not be genuine if your role is being filled by someone else (especially at lower pay), no proper consultation took place, selection criteria were subjective or discriminatory, alternative roles were not genuinely considered, the process seemed rushed or predetermined, or if only certain groups defined by age, gender, or another protected characteristic were affected.

Last updated: 2 May 2026

Your complete guide to redundancy pay, consultation, and settlement agreements

What is genuine redundancy in the UK?

Genuine redundancy arises when an employer needs to reduce its workforce because a business is closing, a workplace is relocating, or fewer employees are needed for a particular kind of work. The role -- not the person -- must be the reason for the dismissal. If you are facing redundancy now, our free settlement calculator gives an indicative range based on your salary, age, and length of service.

The business is closing down completely
The workplace is closing or relocating
The business needs fewer employees to do work of a particular kind
Restructuring means your role no longer exists

What are your statutory rights when made redundant?

Employees with at least two years of continuous service are entitled to statutory redundancy pay, calculated using age-weighted multipliers applied to weekly pay up to £700 (2024/25). Separately, you are entitled to a statutory notice period -- a minimum of one week for each year of employment, up to 12 weeks. Your contract may provide more generous terms than these statutory floors.

Statutory Redundancy Pay

- Half a week's pay for each full year you were under 22
- One week's pay for each full year you were 22-40
- 1.5 weeks' pay for each full year you were 41+
- Maximum 20 years service counts
- Weekly pay capped at £700 (2024/25)

Notice Period

- At least 1 week if employed 1 month to 2 years
- 1 week for each year employed (2-12 years)
- 12 weeks if employed 12+ years
- Check your contract, it may be more generous

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What does a fair redundancy process look like?

A fair redundancy process has four core elements: meaningful individual consultation, objective and consistently applied selection criteria, genuine consideration of alternative roles, and a right to appeal. If your employer skipped any of these steps, the redundancy may be procedurally unfair -- which strengthens your position in settlement negotiations.

Consultation

Individual consultation to discuss the redundancy, alternatives, and selection criteria

Selection Criteria

Fair and objective criteria applied consistently (not based on protected characteristics)

Alternative Employment

Consideration of suitable alternative roles within the organisation

Right to Appeal

Opportunity to appeal the redundancy decision

What can a settlement agreement include in a redundancy situation?

Many employers offer redundancy packages that go beyond the statutory minimum, and these are almost always delivered through a settlement agreement. The agreement locks in the enhanced terms, adds confidentiality obligations, and waives further claims -- making it the vehicle where the negotiable money actually lives.

Enhanced redundancy pay above statutory minimum
Payment in lieu of notice (PILON)
Ex-gratia payments (potentially tax-free up to £30,000)
Continuation of benefits (healthcare, company car)
Agreed reference wording
Legal fees contribution for advice
Outplacement support

When might a redundancy be unfair or not genuine?

A redundancy is not genuine if the real reason for dismissal is something other than a reduced need for workers. Common warning signs include the role being immediately backfilled, selection based on protected characteristics, or a rushed process with no real consultation. These failures can support an unfair dismissal claim -- or at minimum improve your negotiating position on the settlement.

- Your role is being filled by someone else (especially at lower pay)
- No proper consultation took place
- Selection criteria were subjective or discriminatory
- Alternative roles were not genuinely considered
- The process seemed rushed or predetermined
- Only certain groups (age, gender, etc.) were affected

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