Understanding Your Employee Rights When Facing Redundancy

Facing redundancy can be a challenging and uncertain time, but it's crucial to be aware of your rights as an employee during this process. Knowing how to make a claim and understanding what you're entitled to can help ease the financial burden. Here's a comprehensive guide to redundancy and your rights:

Making a Claim - The RP1 Process:

Your claim, referred to as an 'RP1,' is submitted online to the Redundancy Payments Service (RPS). This claim encompasses arrears of pay, notice pay, holiday pay, and redundancy pay. Parker Walsh, our dedicated team, will engage employment specialists IPERA to assist you in this process at no cost. They will reach out to you directly to streamline the claim process.

Arrears of Pay:

If you've been made redundant, you can claim for arrears of pay, covering salary, overtime, contractual commission, and contractual bonus payments. The claim includes any wages owed up to the company's insolvency date. The RPS deducts tax and National Insurance at the basic rate, with a weekly limit of the lower of your pay or 643.

Holiday Pay:

Redundant or resigned employees are entitled to claim outstanding holiday pay accrued but not taken. The claim is subject to the weekly limit of 643 and is also subject to tax and National Insurance. Holiday claims are proportionate to the accrued portion in the employment period, not the full year's entitlement.

Statutory Redundancy Pay:

To qualify for statutory redundancy pay, a minimum of two years' continuous service with the company is required. The payment calculation considers your employment duration, age at the date of redundancy, and weekly gross pay (up to a maximum of 643 per week). The entitlement can be calculated on the official government website.

Notice Pay:

You can claim notice pay if the company fails to provide the minimum statutory notice. The statutory entitlement varies based on your employment duration. The RPS will invite you to complete an 'RP2' online form for notice pay after your statutory notice period ends. The maximum amount paid is 643 per week, subject to tax and National Insurance.

Pension Contributions:

If pension contributions were deducted from your salary but not paid to the pension provider, the RPS will recover these on your behalf. Note that it may take several months for the RPS to make direct payments to your pension provider. The insolvency of the company does not impact individual employees' pension funds, as these are legally owned by each employee.

Sick Leave and Maternity Pay:

If you're on sick leave, the company's responsibility for sick pay ceases post-redundancy. Contact the Department for Work & Pensions (DWP) to understand how to claim benefits during sick leave. For those on maternity leave or about to go on maternity leave, claim outstanding statutory maternity pay from HM Revenue & Customs by contacting them directly at 0300 056 0630.

Conclusion

Understanding your rights during redundancy is crucial. Act promptly, as claims must be made within 6 months of the redundancy date. This knowledge empowers you to navigate the process and secure the compensation you're entitled to as an employee.

_{Photo by Jornada Produtora on Unsplash}

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