UK Employment Rights · 2026
UK Redundancy Rights
Redundancy is the UK employment situation where rights matter most and where the gap between knowing them and not knowing them is most expensive. Most candidates accept the first offer; the candidates who know their rights typically negotiate up 10-25%. After 12 years working with redundancy across many UK employers, the patterns are consistent: statutory is the floor, ex-gratia is negotiable, and the £30,000 tax-free threshold is the structural lever most employees miss.
The statutory floor
Statutory redundancy entitlement requires at least 2 years' continuous service. Calculation: 0.5 weeks' pay for each full year you were under 22; 1 week's pay for each full year aged 22-40; 1.5 weeks' pay for each full year aged 41 and over. Capped at £700/week (April 2024 rate, reviewed annually) and 20 years of service. Maximum statutory redundancy pay is therefore approximately £21,000. Notice period also applies separately — minimum statutory notice is 1 week per year of service (capped at 12 weeks); contractual notice often higher. Consultation periods: 30 days minimum for 20-99 redundancies, 45 days for 100+.
What employers often add
Many UK employers pay above statutory through settlement agreements. Common enhancements: 2-4x statutory at established corporates, 1.5-2x statutory at growth-stage companies. Settlement agreements (formerly 'compromise agreements') legally end disputes in exchange for payment — they typically include the ex-gratia amount, notice period payment, accrued holiday, reference letter terms, and confidentiality clauses. The first £30,000 of an ex-gratia termination payment is tax-free. PILON (pay in lieu of notice) and contractual entitlements above £30k are taxed normally. Employers usually pay £500-£1,500 toward your independent legal advice on the settlement agreement.
What to do if there's a dispute
- 1 Read every document carefully before signing — don't sign in consultation meetings
- 2 Take independent legal advice (employer typically pays for it as part of settlement)
- 3 Negotiate the ex-gratia amount — first offers are rarely final; 10-25% upward movement is normal
- 4 Get reference letter wording in writing before signing
- 5 Confirm outplacement support spec — named provider, hours, duration
Red flags that should worry you
- !Pressure to sign settlement agreements quickly — settlement law specifically protects against this
- !Statutory-only offer when redundancy is part of a larger restructure (employers usually pay enhanced)
- !No legal advice contribution offered
- !Reference wording explicitly negative or restrictive
Where to get help
Acas helpline (0300 123 1100)
Free advice on redundancy procedure and rights
Specialist employment solicitor
Settlement agreement review (employer usually pays)
gov.uk/redundancy-your-rights
Official UK government guidance
Citizens Advice
Free advice for individuals
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