Would Redundancy Pay be Based on Original Hours?

Q.

My employer has recently advised that he will implement 3 or 4 day working if business does not improve in the new year. If the situation eventually leads to redundancy, will redundancy pay be calculated on my original working hours or the reduced hours?

A.

There are a number of issues that arise before you get to the point of working out the redundancy terms, and the number of hours that you work in a week is only one of the factors that governs the amount that you get paid.

Check Your Employment Contract

The first thing to do is to check that your employer has the right to cut down your hours in the first place. The fact that he has advised you that this may happen implies that your current contract of employment is set up in such a way as to allow the employer to do this, or that your employer thinks it is.

It would be worth taking your contract of employment to a solicitor who specialises in employment law or, as that is likely to be quite expensive, to a Citizens' Advice Bureau to see if they can get you the appropriate advice either free or at a reduced rate. If you are lucky enough to be a member of a union then you can get this advice for free.

If your contract does not allow the employer to put you on short hours then the contract must be re-negotiated to allow that to happen. This means consultation and agreement and if you are put on short-time working against your will you could possibly resign and sue for constructive dismissal. It is essential to get legal advice before going down this route though.

Redundancy Pay Factors

Assuming that the employer does have the right to put you on short-time working then any redundancy pay in the future will be calculated using your age and the length of time you have been with the company as well as your weekly wage. There is an upper limit of £330 per week so it could be that dropping the number of hours you do in a week may not affect what you receive.

Because there are so many factors that can affect redundancy pay it would be best to talk this over with someone who will be able to ask you about your situation and give you a more complete answer. The best source of advice would probably be the Advisory, Conciliation and Arbitration Service (Acas) which offers free, impartial and confidential advice on a telephone helpline. You can get the number from local libraries or directory enquiries.

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