Redundancy rights in relation to consultation and pay for older workers

HR expert Anna Ives gives some advice on your rights around consultation and pay when it comes to redundancy.



HR expert Anna Ives has some advice on what your rights are if you are made redundant.


If there appears to be a situation which could lead to redundancies, your employer should consult with you at the earliest practicable opportunity. Your employer should consult with you individually. Where they propose to dismiss 20 or more employees as redundant within a period of 90 days or less, it is required by law to consult the appropriate representatives of any of the employees who may be affected, either by the redundancies or measures taken in
connection with you.

All consultation between your employer, appropriate representatives and you will be carried out with a view to reaching an agreement, avoiding or minimising the number of redundancies, and determining the selection criteria to be used.

How much redundancy pay will you get?

How much statutory redundancy pay you get will depend on:

  • How long you’ve been in your current employment
  • The age you were in each year you worked there, and
  • Your current salary – capped at maximum amounts

Statutory Redundancy Payment is the legal minimum amount of pay you can receive; you cannot be paid less than this, with two years’ service. You might be entitled to more than this, but you will need to check your employment contract or handbook. Some employers will still pay out even if you have less than two years’ service, but again you will need to check about ‘contractual redundancy pay’.

Your age affects the amount of Statutory Redundancy Pay to which you are entitled to. Redundancy is considered to be less disruptive to the lives of young people than to older workers. Therefore each year of continuous service you have in which you were over 41, you will get 1.5 times your standard weekly pay. Only complete years of service count and
service has to be continuous.

Voluntary redundancy/early retirement

When there is a genuine redundancy situation, your employer may invite you to volunteer for redundancy. If you’re close to retirement, your employer may suggest you take voluntary early retirement instead of voluntary redundancy. You can also approach your employer if you would like to be considered for this option. If you choose this option, you will need to consider the financial implications, any benefits you may receive and if you can draw on your pension or


What happens to your pension if you are made redundant? Each workplace is different and it will also depend on the type of pension you have. The Money Advice Service says: “There are two main types of workplace pensions:

  • Defined benefit (also known as salary-related or final salary schemes) – these are always occupational schemes, which means they are specific to your work for a particular employer.
  • Defined contribution (also known as money purchase schemes) – these might take the form of an occupational scheme, a group personal pension or a group stakeholder scheme.”

You will have to stop paying into your pension and leave the current scheme or transfer it to a new scheme if you are made redundant. If you are in a defined benefit scheme you might be able to take early retirement. You should always seek support from an independent financial advisor and your current pension provider when addressing your options.

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