Local Government Ombudsman

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Delivering public value

Calculating redundancy pay

The redundancy payment due to each employee under the statutory redundancy payment depends on his or her age and length of service (up to twenty years). This determines the number of weeks pay due. For service within the organisation, redundancy payment is based on pensionable pay.

Redundancy pay will be paid at the following rates:

  • one and a half weeks' pay for each full year of employment in which the employee was aged 41 or over;
  • one week's pay for each full year of employment in which the employee was aged between 22 and 40; and
  • half a week's pay for each full year of employment in which the employee was aged 21 and under.
Continuous service

The Commission operates under the Redundancy Payments (Continuity of Employment in Local Government, etc.) (Modification) Order 1999. Therefore service with another employer under the Order may be recognised as ‘continuous service’, redundancy pay for those years will be paid at the maximum statutory rate.

In order for service to be counted as continuous, your employment with that employer must have ended less than one week (or less than four weeks if your post was made redundant) prior to your start date with the Commission.

Staff who take a job with a local authority and receive a redundancy payment from the Commission will lose their continuity of employment for future redundancy pay purposes. Equally, staff who have received a redundancy payment from their previous local authority employer may lose continuity of service for redundancy purposes with the Commission.

Members of the Local Government Pension Scheme

Staff who are members of the Local Government Pension Scheme (LGPS) and who are dismissed by reason of redundancy (voluntary or compulsory) whose total scheme membership is at least three months (or who have had a transfer credit in the scheme or who have been subject to a bulk transfer), who are aged 55 years and over, are entitled to immediate payment of a retirement pension and any retirement lump sum due, without reductions. Eligibility and benefits will depend upon age and length of scheme membership as detailed within the LGPS Scheme Rules.

This statement does not confer any statutory rights, which will depend on the regulations in force at the relevant time.

November 2010

Date Updated: 04/04/11