How is the "relevant date" for calculating statutory redundancy pay determined?

The "relevant date" is the date at which an employee's entitlement, if any, to statutory redundancy pay (SRP) is determined, according to the following rules:

1. To qualify for SRP, an employee must have two years' continuous employment with the employer on the relevant date.
   
   
2. The maximum number of years of continuous employment in respect of which payment may be made is 20, ending on the relevant date.
   
   
3. The amount of SRP due is calculated by counting back from the relevant date the number of years continuous employment and paying
   
   
   • 1½ weeks pay for each full year the employee was not under age 41, plus
   • 1 week's pay for each full year the employee was not under age 22, plus
   • ½ a weeks pay for each year the employee was under age 22.
4. The maximum weekly rate of SRP from 1 February 2008 is £330.

Identifying the employee's "relevant date" correctly is a critical part of the SRP calculation. The legislation, as set out in section 145 of the Employment Rights Act 1996, defines the "relevant date" in the context of a number of different situations.

The "relevant date" is,

1. if the employment contract is terminated by notice, whether by the employer or the employee, the date on which the notice expires
   
   
2. if the employment contract is terminated without notice, the date on which the termination takes effect
   
   
3. if the employment contract is a fixed-term contract (with reference only to Government training schemes, agency workers and apprentices), the date on which the term expires
   
   
4. if the employment contract is a limited-term contract (i.e. a contract that is not permanent and that is intended to terminate at the end of a fixed-term, or the completion of a task, or the occurrence of an event) which ends without being renewed, the date on which the termination takes effect
   
   
5. if the employer gives notice but, within that notice period, the employee gives written notice to terminate on an earlier date, the date on which the employee's notice expires
   
   
6. if the employee accepts alternative employment but the employee or employer terminate the new contract during the trial period, the date on which the original employment ended.

Where the relevant date has been decided in any of the above situations but the employer did not give the statutory notice, or less than the statutory notice, to terminate the employment contract, the relevant date is, instead, the date on which the statutory notice would have terminated if it had been given at the appropriate time.

The statutory notice required of employers is one week, plus one week after two years, plus one week for each additional year up to a maximum of 12 weeks.

Example: An employee is dismissed on the grounds of redundancy on Friday, 20 February 2009. No notice is given and the employee leaves immediately.

The employee was born on 8 March 1969 and joined the business on 1 April 2002. On the date of termination, the employee has 6 years' continuous employment and is age 41. An employee in those circumstances is entitled to 6 weeks' SRP.

However, if the employer had given statutory notice, the termination date would have been 3 April 2009, six weeks after 20 February. On that date, the employee would be 42 years old and have 7 years' continuous employment, giving entitlement to 7½ weeks' SRP (i.e. 6 years @ 1 week, plus 1 year at 1½ weeks).

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