In order to claim a redundancy payment an individual must:–
1. Be an employee
An employee is defined as an individual who works under a contract of employment. A contract of employment is a contract of service or apprenticeship. This definition excludes independent contractors, the self-employed, agents and workers supplied by employment agencies and employment businesses, office holders and partners. A director will be entitled to a redundancy payment if they are working under a contract of employment.
2. Have been dismissed
The employee must show that they have been dismissed. This excludes those employees who resign or leave by mutual agreement.
A dismissal arises, broadly, in one of three ways:
• Actual Dismissal
An employee is dismissed if the employer terminates their contract of employment by notice or without notice. This includes situations where the employer either gives the employee notice in accordance with the terms of their contract of employment of dismisses the employee without giving notice (i.e. the employer dismissed summarily).
• Fixed term expires
An employee is treated as dismissed if, where they are employed under a fixed term, that term expires without being renewed. Where an employee’s contract contains a “break” clause allowing the employer to terminate the fixed term contract by giving notice before the fixed term expires, he will also be treated as being dismissed.
• Constructive dismissal
An employee is treated as dismissed if the employee terminates the contract with or without notice in circumstances where he is entitled to terminate the contract without notice because of the conduct of the employer. For example, the employer must have breached an express term of the contract (such as reducing the employees contractual hours, change in job description or reduction in pay) or an implied term of the contract (such as acting in such a way as to damage the relationship of trust between the employer and the employee). The breach of contract by the employer must be a fundamental breach of contract.
3. Have been employed for a continuous period of not less than 2 years starting on the date employment commenced and ending on the effective date of termination.
The effective date of termination means;
• if the contract of employment is terminated by notice, the date on which notice expires: or
• if the contract of employment is terminated without notice, the date termination takes effect: or
• the date a fixed term contract expires
See also: www.gov.uk/redundant-your-rights/overview