Making staff redundant
Giving staff notice
You must give staff notice and agree a leaving date once you’ve finished the redundancy consultations.
Give staff at least the statutory notice period, based on how long they have worked.
| Length of service | Notice you must give |
|---|---|
| 1 month to 2 years | At least a week |
| 2 years to 12 years | A week’s notice for every year employed |
| 12 or more years | 12 weeks |
You can allow staff to leave earlier than the planned leaving date (for example without notice) by offering payment in lieu of notice.
Notice pay
You must give staff notice pay - based on their pay rate and notice period - or make a payment in lieu of notice.
Your employees’ notice pay is based on the average they earned per week over the 12 weeks before their notice period starts.
If your employees earned less than usual because you used the Coronavirus Job Retention Scheme to put them ‘on furlough’, you must work out their notice payments based on what they would have earned normally.
Pay in lieu of notice
If you have included a payment in lieu of notice clause in the employment contract, you can end your staff’s employment with no notice. This lets you make a payment to cover the notice period they would have worked.
These payments must have tax and National Insurance deducted.
When you make payments in lieu of notice, you still have to pay staff the basic pay they would have got during the notice period. You also have to pay pension, private health care insurance or other contributions if it’s in the employee’s contract.