UK Redundancy Rights 2026

What you're entitled to on redundancy

Redundancy triggers four separate entitlements under UK law, each with its own qualifying conditions and calculation method:

1. Statutory redundancy pay — for employees with 2+ years' continuous service. Calculated using years of service (up to 20), age band, and weekly pay capped at £751. Maximum payment: £22,530.
2. Notice pay — statutory minimum is one week per complete year (up to 12 weeks). Payable as working notice or pay in lieu of notice (PILON), which is fully taxable.
3. Accrued holiday pay — all unused holiday entitlement up to your leaving date must be paid out at your daily rate.
4. Enhanced contractual redundancy pay — if your contract or company handbook offers more than the statutory minimum, you are entitled to that higher figure.

Your right to a fair process

Beyond the financial entitlements, you have the right to individual consultation (at least 45 days before dismissal where 100+ redundancies are proposed at one establishment), a genuine selection pool using objective criteria, and the right to be considered for any suitable alternative vacancy. Dismissal without following a fair process can be challenged as procedural unfair dismissal at the Employment Tribunal, even if the redundancy itself was genuine.

Settlement agreements

Many redundancy situations are resolved by a settlement agreement — a legally binding contract under which you waive tribunal claims in exchange for a financial payment, which may significantly exceed your statutory entitlement. You must receive independent legal advice from a qualified adviser before signing. The first £30,000 of a redundancy termination payment is exempt from income tax.