Redundancy

Compensation for redundancy was one of the first employment protection rights introduced into British law. The first piece of legislation was the Redundancy Payments Act 1965. The law is now contained in the main in the Employment Rights Act (ERA) 1996. The aim of a redundancy payment has never been to cushion a person over a period of unemployment but rather to recognise an employee’s stake in his job. This means that it is irrelevant if the employee has another job to go to once he has been made redundant; he is still entitled to a redundancy payment. In addition, the employee’s stake increases the longer he has worked for the employer, and as such his payment increases with age and years of service. A redundancy payment is calculated in the same way as the basic award in unfair dismissal (see Section 9.9.3(a)).