Redundancy payments

A redundancy payment will be payable on the expiry and non-renewal of a fixed term contract in most – but not all – cases.

The definition of redundancy in Section 139 of the Employment Rights Act 1996 is relevant to employees’ entitlement to redundancy pay. A redundancy payment will be payable on the termination/non-renewal of a fixed term contract where the ‘dismissal… is wholly or mainly attributable to the fact that the… requirement of the business for employees to carry out work of a particular kind — either generally or specifically in the place where the employee is employed — has ceased or diminished…’ In other words, there will be a redundancy situation where there has been a permanent or temporary decline in the volume of work so that there is no longer a requirement for the same number of employees to carry out work of a particular kind.

This will generally be the case where the funding has expired and the employment cannot be continued since there will be a reduced requirement in the workforce – ie the University is employing fewer employees. It will not be the case where the reason for the fixed term contract was to cover the absence of another employee, for example on study leave or maternity leave or secondment. In this case, there is not a reduction in the requirement for work and a redundancy payment is not payable. Colleges and Services should check with their HR Business Partner in cases of doubt.

The employee must have been continuously employed by the University for a minimum of two years to be eligible for a redundancy payment. An employee on a one year fixed term contract may be eligible for a redundancy payment if they have previous continuous employment with the University which takes them beyond two years by the final day of their employment. The redundancy payment will be charged to the employing College or Service. Most grants do not allow redundancy payments to be charged to the grant, but the College should check this with Research Accounting.