You may receive one or more of the following, depending on your statutory and contractual entitlements, and any agreements which the union may have negotiated locally. You may receive:
- statutory redundancy pay
- a discretionary enhanced redundancy payment
- compensation for early retirement on grounds of redundancy
- notice pay.
Statutory redundancy payment
You will have an entitlement to statutory redundancy pay (which is the legal minimum entitlement) if:
- you are an employee (agency supply workers will not normally qualify for redundancy pay, but seek advice from the Adviceline in England or the Wales office), and
- you have two years’ continuous employment with your employer at the date of dismissal (successive employment with different local authorities may count as continuous employment)
- you have been dismissed by reason of redundancy.
The amount of statutory redundancy pay you are entitled to will depend on the length of your continuous service, your age and how much you are paid. The minimum statutory entitlement is calculated as follows:
For each year of service from age 41 or over 1.5 weeks’ pay
For each year of service from age 22 to 40 1 week’s pay
For each year of service below age 22 0.5 week’s pay
The maximum number of years of employment that can count is 20 years and a week's pay is normally limited to a statutory maximum, which changes each April. Use the government's redundancy pay calculator at Calculate your statutory redundancy pay - GOV.UK (www.gov.uk) to work out your statutory entitlement.
The formula used to calculate payment is:
Years of employment x multiplier x weeks pay (up to statutory limit).
Example:
You are 60 years old and earn £650 per week gross. You have worked continuously with the same employer for 23 years.
Calculation
Although you have 23 years of service, only 20 years of service will count in the calculation. Your gross weekly wage will also be limited to [current statutory cap] per week. 60 years of age and 20 years of service equates to a multiplier of 29.5 weeks’ pay, i.e., 19 years @ 1.5 weeks’ pay and 1 year @ 1 week’s pay. Multiply [current statutory cap on week's pay] by 29.5 to give you your statutory redundancy payment.
Claiming redundancy pay
There is no need for you to claim redundancy pay, as payment should be paid automatically. Employees under notice of redundancy should be given a written statement showing the date of termination and how the amount of redundancy payment was arrived at.
If you do not receive such a statement during your notice period and/or you do not receive redundancy pay soon after your employment comes to an end, contact the Adviceline or Wales office without delay.
If you are employed by the local authority, proprietor or governing body as a regular supply worker, for example, and your pay varies from week to week because your hours of work vary, your week’s pay will be averaged over the 12 weeks immediately before the calculation date.
A case called Gilbert, North and Bellwood v Barnsley MBC (UKEAT/674/00) established that a week’s pay must relate to a week’s work, which should be calculated by reference to the total number of weeks the employee is required to work, plus the weeks for which they are paid to be on holiday. Contact the Adviceline if your employer insists on dividing your annual salary by 52 weeks.
Normally service in a series of local authorities will count as continuous.
Any period of self-employment or employment in an independent school in the 20 years prior to your dismissal will not count for the purposes of calculating your period of continuous employment.
However, service in sixth form colleges, academies, community and technical colleges, FE colleges and non-education posts in local government and related sectors in the 20 years prior to your dismissal will be counted.
If you are made redundant while employed in an independent school, you will not be able to count previous service in local authority employment as continuous service, unless your contract of employment provides otherwise.
Contact the Adviceline or Wales office if you are not sure whether previous employment in local government or a related sector will count towards your period of continuous service.
If you are concurrently employed and one of your jobs is made redundant, you will need to consider:
- how your employer intends to assess your period of continuous service
- which salary will be used to calculate redundancy pay.
Example:
You started work as a part-time teacher on 0.5 fte in 2008. In 2009, you were offered supply teaching work by the same employer and you have worked concurrently as a regular part-time teacher and a supply teacher since. Your supply teaching work is made redundant in 2021. What is your period of continuous service for the purpose of calculating statutory redundancy pay?
Assuming you have no ‘relevant service’ prior to 2008, your period of continuous service will be 13 years (i.e. 2008 to 2021).
Your week’s pay will be calculated by reference to your supply teaching salary since that is the job which has been made redundant.
Local authorities (LAs) have discretion to make payments which are higher than the statutory maximum. For example, statutory redundancy pay may be calculated on actual salary or on any other basis, provided they are not higher than the following maximum limits:
Service | Pay |
---|---|
For each year of service up to and including age 40 | 2 weeks’ pay |
For each year of service from age 41 or over | 3 weeks’ pay |
Local authorities have discretion to award up to 104 weeks’ pay.
If you are employed by an LA or you work in a maintained school, try to discover whether the LA operates an enhanced redundancy payment scheme and if it does, whether the scheme will apply to you.
You would normally work your notice period. However, if your contract makes provision for payment ‘in lieu of notice’ and your employer does not require you to work your full notice period, you will be entitled to notice pay.
Your statutory entitlement is to a week’s paid notice for each complete year of service, up to a maximum of 12 weeks. So, if you have been employed for 16 years at the date of redundancy, you will be entitled by law to 12 weeks’ paid notice.
However, your statutory entitlement is separate from your contractual entitlement. Your contract of employment might well entitle you to longer notice. Therefore, always check the terms of your employment contract to ensure that you have been given the right amount of notice (refer to the Burgundy Book, the national agreement on teachers’ conditions of service in England and Wales, if it forms part of your contract). Remember that your contract of employment cannot offer you less notice than you are entitled to by statute.
Note: Notice pay and statutory redundancy pay are separate entitlements. You may be entitled to receive payment for both.
If your contract allows for payment in lieu of notice and your employer offers you this, you do not have to work the whole notice period.
Be careful not to confuse consultation or warning letters with notice of dismissal. Notice only counts if it is clearly addressed to you and specifies when your employment will end. If you leave because you receive correspondence warning you that redundancies are coming, you may lose your right to redundancy pay.
The first £30,000 of redundancy pay will be tax-free, but any amounts in excess of that sum may be taxed. If you receive notice pay or arrears of wages (including holiday pay) as part of your redundancy settlement, they will be subject to tax.
Your right to redundancy pay may be lost if you are offered ‘suitable’ employment before your notice period expires, and the new post is due to start less than four weeks after your existing employment terminates.
If you want to leave before your notice period expires in order to take up another job, you can either negotiate a start date which will not jeopardise your redundancy entitlements or negotiate an earlier termination date.
The above applies only to employees, so you are unlikely to be affected if you opt for self-employment, e.g. you move from local authority employment to agency supply teaching. You will also be unaffected if:
- you receive a job offer after your employment ends.
- your new job starts more than four weeks after your employment ends.
- your new job does not count as continuous service.
If your employer fails to pay your statutory redundancy entitlement because their business becomes insolvent, you may apply for payment out of the National Insurance Fund. However, the fund cannot pay out unless your employer is formally insolvent.
If your employer closes down your school/college, this may not be sufficient proof of insolvency but if this happens, contact the Adviceline or Wales office as soon as possible to ensure you do not lose out financially.
You may be able to claim one or more of these benefits if you are no longer working:
- Jobseekers allowance/universal credit if you are looking for work.
- Employment & support allowance/universal credit if you are not fit for work.
- Income support/universal credit if you do not have to sign on.
- Housing benefit/universal credit for help with rent.
- Council tax benefit for help with council tax.
- Pension credit if you are aged 60 or over and do not want to claim JSB.
You may obtain specific advice about benefits from your nearest Citizens Advice office.