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Redundancy by sectorRetail redundancy: your rights, pay and settlement agreements
Retail redundancy pay for variable-hours staff, store closures, insolvency claims and how settlement agreements are used in the retail sector.
Retail redundancies often follow store closures, restructuring of head office functions, or company insolvency, and the sector employs large numbers of part-time and variable-hours staff, which affects how redundancy pay is calculated. Calculating a week's pay for employees without fixed hours involves averaging pay over a reference period, which can make the sums more complicated than for salaried staff. Where a retailer becomes insolvent, employees can usually claim statutory redundancy pay and other sums, such as unpaid wages and notice pay, from the government's Redundancy Payments Service rather than the employer directly. Settlement agreements are less common in mass store closures but are used for individual exits and disputes.
Key points
- Calculating a week's pay for part-time or variable-hours retail staff involves averaging recent earnings.
- 20 or more redundancies at one store or site trigger collective consultation obligations.
- If a retailer becomes insolvent, claims usually go to the government's Redundancy Payments Service.
- Settlement agreements are more common for individual or head office exits than mass store closures.
Settlement agreements in retail
Settlement agreements are less common in large-scale retail store closures, where statutory redundancy and collective consultation are usually followed instead, but they are still used for individual exits, head office restructures, or to resolve disputes. If an employer is insolvent, a settlement agreement may not be practical and a claim to the Redundancy Payments Service is the more relevant route. Where an agreement is offered, independent legal advice is still required and normally paid for by the employer.
Been offered a settlement agreement?
If your retail employer has offered you a settlement agreement as part of a redundancy, we will review it the same working day and tell you honestly whether the offer is fair. Free to you when your employer pays our fee, which is the case in nearly every UK settlement agreement.
Retail redundancy: frequently asked questions
How is redundancy pay calculated if I work variable hours in retail?
For employees without fixed hours or pay, a week's pay for redundancy purposes is based on an average of earnings over a reference period, usually the 12 weeks before the calculation date, rather than a single week's pay. This can make the calculation more complex than for salaried staff, so it is worth checking the figures your employer has used.
What happens to my redundancy pay if my employer goes bust?
If your employer becomes insolvent, you can usually claim statutory redundancy pay, and other sums such as unpaid wages, holiday pay and notice pay, from the government's Redundancy Payments Service rather than the employer itself. Payments are subject to statutory limits and the claims process is separate from a normal redundancy or settlement negotiation.
Will I be offered a settlement agreement if my store closes?
Not usually for large-scale closures, where statutory redundancy and collective consultation are the normal process, but settlement agreements are used for individual exits, head office restructures, or where there is a dispute alongside the redundancy. If one is offered, you are still entitled to independent legal advice before signing.