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Would Redundancy Pay be Based on Original Hours?

By: Chris Hogan MSc - Updated: 28 Nov 2014 | comments*Discuss
Employer Redundancy Pay Advice


My employer has recently advised us that he will implement 3 or 4 day working if the 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?

(Ms Elizabeth Smith, 8 December 2008)


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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@Eleanor -You should only get 18 months redundancy as you were employed by a different company and I assume you would have been given a new contract from the new firm? I'd give Acas a call they will give you some free advice.
Nick - 28-Nov-14 @ 12:18 PM
I have been working in the same shop for 8 years it has changed owners twice in the agreement they keep on the same employees. Now my new employer of 18 months is cutting back an he doesnt need me to work for him. So do i qualify for redundancy? For the 8 years i have worked in the same shop. My old employer. Seems to think i am?
eleanor - 27-Nov-14 @ 11:08 PM
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