Government interest free loan for redundancy payments
If your business is in financial difficulty, one consideration will be to make employees redundant. When an employee with more than 2 years’ continuous service is made redundant they are entitled to a statutory redundancy payment calculated based on their length of service, age and gross weekly pay capped at £489 per week. Government redundancy calculator is a useful tool.
On top of statutory notice you will also need to serve the employees with notice. The length of notice will be at least one week for each complete year of service up to a maximum of 12 weeks, or longer depending on the terms of the contract.
If you cannot afford to make the redundancy payment, you may qualify for the financial difficulty scheme. This is an interest free loan from the government to cover redundancy payments. You would need to be able to demonstrate to that being able to cover the cost of redundancies will mean the business will survive and some jobs will be saved.
If you have any questions or would like more information, please contact Kate Brooks on 01202 057754.