Redundancy Notice

The document can be used by an employer who is based in Great Britain to notify an employee of their final selection for dismissal by reason of compulsory redundancy. The document can be adjusted to cover the relevant information which will be applicable to the employee's dismissal, including:

• information regarding the employee's score in reference to the selection process and criteria;
• the relevant notice period and confirmation of their final date of employment (formal notice);
• where the employee is to be dismissed without notice, the details of the payment they will receive in place of their notice period (known as a 'PILON' payment);
• details regarding any accrued annual leave which the employee may be owed and how this will be paid to the employee;
• any deductions which will be made in respect of annual leave taken by the employee which is excess of their entitlement;
• the employee's entitlement to statutory redundancy pay and the relevant calculation for such pay;
• the employee's entitlement to any contractual redundancy pay and the relevant calculation for such pay;
• details of any ex gratia (voluntary) payment which the employer may be paying to the employee;
• details of any support which the employee may be offered in relation to the redundancy;
• information regarding the appeal process in respect of the redundancy decision.

Statutory redundancy pay

Before completing this document, it useful to note the following points in relation to statutory redundancy pay:

• Employees with at least two years' continuous service will be eligible for statutory redundancy pay;
• Statutory redundancy pay is calculated with reference to an employee's gross weekly salary, length of service and age as follows:

(a) 1.5 of a week's pay for each full year of service where the employee was aged 41 or more;

(b) 1 week's pay for each full year of service where the employee was aged 22-40;

(c) 0.5 of a week's pay for each full year of service where the employee was under the age of 22 for any part of the year.

• A week's pay is limited to the amount of £571 for the purposes of the calculation (where an employee's gross pay is more than this amount, £571 will be used in the calculation);
• A maximum of 20 years can be taken into account when making the above calculation;
• The maximum amount of statutory redundancy pay which an employee can receive is £17,130.
• Statutory redundancy pay is tax free.

Other considerations

It is also useful to note the following regarding redundancy:

• Where collective redundancies are taking place, a collective consultation process should have been adhered to;
• In all circumstances, employees should be individually consulted prior to a final redundancy decision;
• The selection process for redundancy should always be fair and should not be discriminatory;
• Other redundancy payments (such as contractual entitlement and ex-gratia payments) can in some circumstances be considered tax free but there is a limit of £30,000 on all tax free redundancy payments (including statutory payments). Any amount in excess of that will be subject to income tax;
• Employees with not less than 2 years' service are entitled to reasonable paid time off to look for new work during their notice period.

Many employers choose to hold a redundancy policy, which can be consulted during the redundancy process.

How to use this document

The employer should enter the relevant information into the document. It is important to take care to ensure that the correct information is entered so as to minimise the chances of an unfair dismissal claim from the employee. Any relevant contractual provisions (for example in relation to notice periods and contractual redundancy pay entitlements) should be checked in accordance with the employee's contract of employment. It is also possible to refer to the government website to check the calculation of an employee's statutory redundancy pay and holiday entitlement.

An employer should always meet with the employee to explain the outcome of the redundancy selection process, however the relevant information must also be provided in writing as per the purpose of the redundancy notice. The document should therefore be signed by the employer and provided to the employee. Although the redundancy notice must be given in writing, the employer can decide whether to deliver the notice to the employer personally during a meeting, or via post to their address. It is also possible to send the notice in electronic format by attaching it to an email to the employee.

Where the employee raises an appeal to the decision, the appeal process should be followed accordingly (following the process which will be set out within the notice).

Relevant law

The key pieces of applicable legislation in relation to redundancy are:

• The Employment Rights Act 1996
• The Trade Union and Labour Relations (Consolidation) Act 1992
• The Equality Act 2010
• The Income Tax (Earnings and Pensions) Act 2003

Acas (the Advisory, Conciliation and Arbitration Service) also provides guidelines and advice to employers in respect of redundancy.

Help from a lawyer

You can choose to consult a lawyer if you need help.

The lawyer can answer your questions or help you through the process. You will be offered this option when you complete the document.

How to modify the template

You fill out a form. The document is created before your eyes as you respond to the questions.

At the end, you receive it in Word and PDF formats. You can modify it and reuse it.