Redundancy is one of those things that feels abstract until it isn't. One day you're in a Monday morning meeting; the next you're being handed a letter and asked if you have any questions. Most people don't, because they're in shock.
This guide cuts through the fog. Here's what the law actually says, what you're owed, what a fair process looks like, and what to do in the days that follow.
What counts as redundancy
Redundancy has a specific legal meaning in the UK. It happens when your employer needs fewer people to do your kind of work, usually because the business is closing, moving, or restructuring. It is not a performance issue, and it should never be used as a back-door dismissal. If it is, that's unfair dismissal, which is a different (and more serious) matter.
You need two years of continuous service with the same employer before you're entitled to statutory redundancy pay. Under two years and you have fewer protections, though you still have rights around notice and discrimination.
What a fair redundancy process looks like
Employers can't simply pick names out of a hat. A fair process generally involves warning employees that redundancies are being considered, explaining the business reasons, applying objective selection criteria (attendance records, skills assessments, appraisal scores) rather than subjective ones, and consulting with those at risk before any final decision is made.
If 20 or more redundancies are planned within 90 days, the employer must collectively consult for at least 30 days before issuing any notices; 100 or more redundancies require 45 days. These are legal minimums under the Trade Union and Labour Relations (Consolidation) Act 1992, and failing to observe them can result in a protective award of up to 90 days' gross pay per employee.
You are also entitled to be accompanied to any redundancy meeting by a trade union representative or a work colleague.
Statutory redundancy pay: the numbers
Statutory redundancy pay is calculated using three factors: your age, your length of service and your weekly pay (capped at £700 per week as of April 2026).
The formula works as follows:
- Half a week's pay for each full year of service when you were under 22
- One week's pay for each full year of service between ages 22 and 40
- One and a half weeks' pay for each full year of service at 41 or over
Service is capped at 20 years. So the maximum statutory payment is £21,000 (20 years at the top rate). Your employer may offer enhanced redundancy pay above this; check your contract.
Statutory redundancy pay is tax-free up to £30,000. Payments above that threshold are subject to income tax. Use the government's redundancy pay calculator on GOV.UK to get your precise figure.
Notice periods
You're entitled to statutory minimum notice regardless of what your contract says. The minimums are one week's notice after one month of service, then one week per year of service up to a maximum of 12 weeks.
Your contract may specify a longer notice period; if so, you get whichever is greater. During your notice period you continue to accrue holiday and must be paid your full normal wage. Your employer can ask you to work your notice, put you on garden leave or pay you in lieu; all three are lawful.
Your right to appeal
You have the right to appeal a redundancy decision. This is not optional on your employer's part; it's part of a fair process. If you believe the selection criteria were applied unfairly, that you were chosen for discriminatory reasons or that proper consultation didn't take place, put your appeal in writing within the timeframe your employer specifies (usually five to ten working days).
If the appeal fails and you still believe the process was flawed, you can raise an Employment Tribunal claim. The deadline is three months minus one day from the date of dismissal, so don't sit on it.
The first 48 hours: what to do immediately
The immediate priority is paperwork. Get everything in writing: the reason for your redundancy, your leaving date, your final pay breakdown and confirmation of your redundancy payment. If anything is missing, ask for it.
Check your final payslip carefully. It should include outstanding salary, any accrued but untaken holiday pay (calculated on your full normal earnings, including regular overtime) and your redundancy payment.
If you're in financial difficulty, you can claim Universal Credit while serving your notice period; you don't have to wait until your last working day. GOV.UK's benefits calculator is worth running immediately. If you've been employed for some years and paid National Insurance, you may also be eligible for contribution-based Jobseeker's Allowance.
Job searching while your notice runs
This is the most useful thing you can do with notice time, and most people waste it. You are legally entitled to reasonable paid time off to look for work or arrange training during your notice period if you've been continuously employed for two years or more.
Use that time. Update your CV before the redundancy shock fades; your recent achievements are sharpest in your memory right now. If your CV needs a structural rethink, the guidance on CV formats: chronological, functional, and hybrid is a solid place to start.
Don't overlook LinkedIn. A quietly updated profile and a few well-placed messages to former colleagues can open doors that job boards never will. If you're not sure how to do that without feeling awkward about it, the guide on how to use LinkedIn to get noticed by recruiters covers the approach honestly.
If redundancy is prompting a wider rethink about what you do next, the piece on how to change careers without starting from scratch is worth reading before you start applying everywhere in a panic.
Tax: the bit people forget
If you've been on PAYE and your employment ends part-way through the tax year, you may have overpaid income tax. HMRC won't usually refund this automatically if you're claiming benefits, but if you're not, you can claim a refund using form P50 once four weeks have passed since you stopped working. Keep your P45; you'll need it.
Redundancy payments under £30,000 are tax-free. Payments above that are taxed in the year they're received, which can sometimes push you into a higher rate band. If your payout is substantial, a one-off conversation with an accountant is cheaper than the tax bill you might not have seen coming.
If something feels wrong
Not all redundancies are genuine. If you suspect yours is a cover for something else, were the only person in your team selected without clear criteria being explained, or were chosen shortly after a protected disclosure (whistleblowing) or taking maternity leave, take advice quickly.
ACAS has a free helpline (0300 123 1100) and an early conciliation service that must be used before any Employment Tribunal claim. Citizens Advice can also help you assess whether you have a case.
Redundancy is disruptive and often demoralising, but it is also, for many people, the thing that finally forces a better decision. Use the notice period, know your numbers and don't sign anything that waives your rights until you've read it properly.
Sources
- GOV.UK: Redundancy: your rights
- GOV.UK: Calculate your statutory redundancy pay
- GOV.UK: Notice periods
- ACAS: Redundancy
- CIPD: Redundancy: an overview