Redundancy pay

Q: A colleague who went from full-time to part-time work two months ago has now been made redundant. Is her redundancy pay an average of her past three months’ earnings or based on her part-time pay only?

A: Redundancy pay is based on the employee’s contract at the time s/he is made redundant.

The amount of a “week’s pay” for redundancy pay is calculated in accordance with sections 221 to 224 of the Employment Rights Act 1996.

If your colleague has fixed working hours and is paid the same every week, regardless of how many hours she has actually worked, her week’s pay will be whatever she normally gets for that week.

If her pay varies according to the amount or timing of the work she does in that week, or if she has no “normal” working hours, her pay would normally be averaged over 12 weeks. However, in new employment situations or other special cases, a week’s pay is the amount that “fairly represents a week’s pay”; an employment tribunal would calculate this by applying the provisions as appropriate (in your colleague’s case, for example, by averaging pay over the past two months), taking into account what the employee had actually been paid, what s/he had been offered when she took the job, and how much is paid to people in comparable employment.