Compromise Agreement – Do You Qualify For a Redundancy Pay?

Do You Qualify for a Redundancy Pay?You could be made redundant by your employer if there is dismissal because your job role in the business is disappearing. These days, redundancies may be inevitable. The company may have reorganized or streamlined operations; it may have been acquired by another business; or it may have decided to fold its existence. You should know that you are entitled to a redundancy pay especially if the employer has employed you for at least the last two years.

If you have been employed by the employer for more than a year, you have the legal right not to be dismissed unfairly. Your employer should make it clear that the dismissal is based on fair reason, which is true redundancy. The employer must still adhere to a fair procedure in selecting you for redundancy. Otherwise, you could claim for unfair dismissal, which is usually dreaded by most employers.

For you to qualify for redundancy pay, you should be both ‘dismissed’ and ‘made redundant.’ As a redundant worker, you could legally claim a minimum lump sum as a redundancy pay. Some employees might qualify for greater entitlement under the employment contracts.

In general, you are qualified for a minimum statutory redundancy pay if you: are an employee; have been declared or made redundant; have at least two years of continuous service to the employer (the count should begin when you were 18 years old, if you have been employed younger than that age); find no suitable alternative employment that fits your qualifications within the business. Take note that unreasonably refusing a suitable alternative employment offer could make you lose your qualification to a statutory redundancy pay.

You could also be entitled to a redundancy pay if you have been laid off temporarily for about four weeks or more in a row. The same goes if the layoff has spanned six to 13 weeks.

You are entitled to a printed statement that shows how your redundancy pay was calculated. Your redundancy pay should be computed as follows: 1.5 week’s pay for each year of service (continuous) if you are more than 41 years old; 1 week’s pay for each year of service if you are between 22 years old and 41 years old; and half a week’s pay for each year if you are under 22 years old.

Do not be surprised when your employer offers an increased redundancy pay in exchange for your commitment not to file for any subsequent claim in the future. You could be asked to enter into a compromise agreement. The document should be signed as a proof that you are agreeing not to make the employer liable for any other responsibility to you following the redundancy.

When entering into any compromise agreement, you must hire the services of a reliable and independent employment solicitor. You need sufficient and appropriate legal guidance prior to signing the agreement. This is because the document would be final and binding after you have signed it. Choose a highly competent and trustworthy employment law specialist.

Employment Law