Redundancy Notice Periods What notice must employers give for redundancy? Understand statutory notice, contractual notice, and payment in lieu of notice.
Last updated: 30 January 2025 Notice periods in redundancy protect employees by giving time to find new work or providing equivalent pay.
Statutory Notice
Minimum Notice Periods
Service Statutory Notice 1 month to 2 years 1 week 2 to 3 years 2 weeks 3 to 4 years 3 weeks 4 to 5 years 4 weeks (continues 1 week per year) ... 12+ years 12 weeks (maximum)
The Formula
Statutory notice = 1 week per complete year of service
Minimum: 1 week (after 1 month)
Maximum: 12 weeks
Examples
Years' Service Statutory Notice 6 months 1 week 2 years 2 weeks 7 years 7 weeks 15 years 12 weeks (capped)
Contractual Notice
When Contract Gives More
Contract Says Statutory You Get 1 month 1 week 1 month 3 months 4 weeks 3 months 6 months 8 weeks 6 months
The Rule
Always entitled to the longer of:
Statutory notice, OR
Contractual notice
Never less than statutory.
Checking Your Contract
Look for:
Notice clause
Termination provisions
May vary by reason (redundancy vs resignation)
May increase with service
Payment in Lieu of Notice (PILON)
What Is PILON?
Instead of working notice:
Element Detail Employer pays For notice period You don't work Leave immediately Same money (Usually)
When It's Used
Reason Example Employer preference Don't need you to work Employee preference Want to leave quickly Mutual agreement Suits both parties Contractual right PILON clause in contract
Contractual vs Non-Contractual PILON
Type Effect Contractual PILON Employer has right to pay instead Non-contractual Must be agreed Tax treatment Differs (see below)
PILON and Tax
Contractual PILON
Treatment Detail Taxed as earnings Full tax and NI No £30k exemption On this element Normal payroll Processed normally
Non-Contractual PILON
More complex:
Element Treatment Post-Employment Notice Pay (PENP) Taxable Remaining May be tax-free (up to £30k)
PENP Calculation
What It Is Meaning PENP Amount treated as notice pay Complex formula Based on notice and pay Always taxed As earnings
Garden Leave
What Is It?
Feature Detail Remain employed During notice Don't work But on call Full pay Continues Restrictions May apply
When Used
Reason Example Restrictive covenants Enforcing non-compete Sensitive information Protecting data Client relationships Preventing poaching Transition Handover complete
vs PILON
Garden Leave PILON Still employed Employment ends Restrictions apply No longer employed Notice served Notice paid out Benefits continue May end
Notice Rights During Redundancy
What Happens During Notice
Element Position Salary Continues Benefits Usually continue Annual leave Accrues Time off for job search Entitled (if 2+ years)
Time Off for Job Hunting
If being made redundant and have 2+ years' service:
Right Detail Reasonable time off To look for work Paid At normal rate Amount Reasonable (40% of week suggested) Evidence May need to show reason
Collective Redundancy Notice
Additional Requirement
For 20+ redundancies in 90 days:
Number Minimum Consultation 20-99 redundancies 30 days 100+ redundancies 45 days
This is in addition to individual notice.
Protective Awards
If employer fails to consult:
Award Amount Maximum 90 days' pay per employee Tribunal decides Based on circumstances
Working Notice vs PILON
Working Notice
Advantage Disadvantage Time to handover Must work Job hunting time May be awkward Benefits continue Notice period before leaving
PILON
Advantage Disadvantage Leave immediately Lose job hunting time right Start new job sooner May be taxed more Clean break No transition period
Notice Pay Calculation
Basic Calculation
Element Calculation Weekly pay Basic salary ÷ 52 Notice weeks From above table Notice pay Weekly pay × weeks
What's Included
Include Exclude Basic salary Expenses Regular overtime One-off bonuses Regular commission Benefits in kind Regular allowances
Statutory Cap
For statutory notice pay purposes:
Factor Limit Weekly pay cap £700 (2024-25) Applies to Statutory notice only Contractual No cap
If Notice Not Given
Employer Fails to Give Notice
Situation Remedy No notice given Claim for notice pay Short notice Claim difference Wrongful dismissal Tribunal or court
What You Can Claim
Element Detail Notice pay Gross amount Holiday accrued During notice Benefits Lost during notice
Waiving Notice
Employee Waiving Notice
Situation Outcome Want to leave early Can ask employer Employer agrees No notice pay required Employer refuses Must work or forfeit
Mutual Agreement
If both agree:
Early release
May affect pay
Document clearly
Consider tax
Practical Considerations
During Redundancy Notice
Action Advice Job search Use your time Take time off Exercise your right Consider PILON If offered Check final pay Notice included
Documents to Check
Document Look For Contract Notice clause Handbook Additional terms Redundancy letter Notice given PILON terms If applicable
Summary Table
Scenario Notice 3 years, contract says 1 month 3 weeks (statutory higher) 3 years, contract says 3 months 3 months (contractual higher) 15 years, contract says 1 month 12 weeks (statutory capped) 15 years, contract says 6 months 6 months (contractual higher)
Frequently Asked Questions
What notice do I get if made redundant? You get whichever is longer: your contractual notice or statutory minimum. Statutory minimum is 1 week for each year of service (up to 12 weeks maximum). Your contract may give you more.
Can I be paid instead of working notice? Yes, if your contract allows it or your employer agrees. This is called payment in lieu of notice (PILON). You receive pay for the notice period without working it. Tax treatment depends on whether PILON is contractual.
What's the statutory notice for redundancy? Statutory minimum notice is: 1 week if employed 1 month to 2 years, then 1 week per year of service (2 years = 2 weeks, 5 years = 5 weeks), up to maximum 12 weeks for 12+ years' service. Disclaimer: This information is for general guidance only and does not constitute legal advice. Employment law is complex and changes frequently. For specific situations, consult ACAS, a qualified employment lawyer, or HR professional.