How much redundancy should I pay?

[strawberriesandrosepetals]

I have to close my small business for family reasons and my employee will lose her job. None of this was her fault. She has been with me 3 years but I have known her longer.

Statutory redundancy is naff all and obviously I don't have to restrict it to that but wondered how much more?

I was thinking approx 3 months pay. Does that seem about fair?

Sorry, nobody else to bounce ideas off!

3 months sounds like a lovely gesture and hopefully let’s her get another post before it runs out.

A month for each year worked is the typical enhanced package on condition she stays to the date of your choosing (companies typically want staff until the closure date)

I've only ever worked for one company where they gave 1 months pay for every full year worked. Everywhere else has been a week for each full year.
A month pay for each year is very generous and a lovely gesture as she will know it is alot more than what she would normally get

Thank you everyone.

Like you said, statutory is not much but usually all anyone expects. But on the other hand if you give more you worry they're thinking 'well, if she's giving more, she could have gone higher than that the tight cow!'

It's difficult when you work for yourself as there isn't anyone to chat through the ideas with.

It sounds like I'm thinking along the right lines then in terms the norm for an enhanced redundancy and I really appreciate all your feedback.

Thank you x

In my industry the norm for enhanced redundancy is between 2 weeks and 3 weeks per full year (even one working day less and you lose that year!)

I feel a need to apologise for the random apostrophe in my post.

😳

Can you afford 3 months plus 1 months notice?

It rather depends what you can afford, but 3 months for 3 years is generous

The government website has a calculator which can be used to see if someone is getting a fair payment.

Redundancy now generally goes on service in weeks and age.

@Whatnotea Yes, should have said, that will be in addition to notice.

@Xyzzzzz Gov website shows statutory which comes out at about £1400. I was thinking £5k so I definitely won't be underpaying.

I think I'll go with it.

Thanks all

You need a company policy. You need to have a sound rationale and local benchmarks. You need to be able to prove that you are not tax avoiding by doing this.

I assume that you will get the same package? So a month for each year if you are an employee as well. So you need to bear that in mind.

Hi
I’ve been made redundant a few times.
First time was Statutory and pants 3 years equates to about a weeks pay.
Next time was given a month for each year I’ve worked there which is better.
Last time due to the job I had was a month for every year plus 6 months extra if I stayed until they wanted me to leave that was WOW!

What your offering is perfect.

lol at you need a company policy. Good idea - OP write a policy in advance of closing your business and making your 1 member of staff redundant. that is a great use of time.

We dont have a policy and we are a public sector organisation.

We offer statutory unless we decide to offer an enhanced scheme, which is usually 1.5 statutory.

You present it as being exceptionally generous and the nice employees agree that you are, and the bastards take you on and you end up with a settlement agreement

It sounds like t a good amount op - all the best with it.

lol at you need a company policy. Good idea - OP write a policy in advance of closing your business and making your 1 member of staff redundant. that is a great use of time.

Did you actually read the reply? The op is closing down a business. They need to ensure that HMRC do not thinks that they are trying to tax avoid. So yes a benchmarked policy would be a good idea.

But hey they can follow your advice based on your experience as an employee in a public sector organisation.