Employment Rights Act 1996, section 162

Amount of a redundancy payment

Part XI Redundancy payments etc.

(1)The amount of a redundancy payment shall be calculated by—

(a)determining the period, ending with the relevant date, during which the employee has been continuously employed,

(b)reckoning backwards from the end of that period the number of years of employment falling within that period, and

(c)allowing the appropriate amount for each of those years of employment.

(2) In subsection (1)(c) “the appropriate amount” means—

(a)one and a half weeks’ pay for a year of employment in which the employee was not below the age of forty-one,

(b)one week’s pay for a year of employment (not within paragraph (a)) in which he was not below the age of twenty-two, and

(c)half a week’s pay for each year of employment not within paragraph (a) or (b).

(3)Where twenty years of employment have been reckoned under subsection (1), no account shall be taken under that subsection of any year of employment earlier than those twenty years.

(4)F863. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(5)F863. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(6)[F864 Subsections (1) to (3)F864] apply for the purposes of any provision of this Part by virtue of which an [F865employment tribunalF865] may determine that an employer is liable to pay to an employee—

(a)the whole of the redundancy payment to which the employee would have had a right apart from some other provision, or

(b)such part of the redundancy payment to which the employee would have had a right apart from some other provision as the tribunal thinks fit,

as if any reference to the amount of a redundancy payment were to the amount of the redundancy payment to which the employee would have been entitled apart from that other provision.

F866 (7). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(8)F863. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Definitions used in section 162 8

redundancy payment

“redundancy payment” has the meaning given by Part XI,

Defined in s.235(1) · see it in the full Act
the relevant date

For the purposes of the provisions of this Act relating to redundancy payments “the relevant date” in relation to a notice of intention to claim or a right to a redundancy payment in pursuance of such a notice—

(a)in a case falling within paragraph (a) of subsection (2) of section 148, means the date on which the last of the four or more consecutive weeks before the service of the notice came to an end, and

(b)in a case falling within paragraph (b) of that subsection, means the date on which the last of the series of six or more weeks before the service of the notice came to an end.

Defined in s.153 · see it in the full Act
relevant date

“relevant date” has the meaning given by sections 145 and 153,

Defined in s.235(1) · see it in the full Act
employee

(1) In this Act “employee” means an individual who has entered into or works under (or, where the employment has ceased, worked under) a contract of employment.

Defined in s.230(1) · see it in the full Act
employed

and “employed” shall be construed accordingly.

Defined in s.230(5) · see it in the full Act

(6) This section has effect subject to sections 43K , 47B(3) and 49B(10) ; and for the purposes of Part XIII so far as relating to Part IVA or section 47B, “worker”, “worker’s contract” and, in relation to a worker, “employer”, “employment” and “employed” have the extended meaning given by section 43K.

Defined in s.230(6) · see it in the full Act
employment

(5) In this Act “employment”—

(a)in relation to an employee, means (except for the purposes of section 171) employment under a contract of employment, and

(b)in relation to a worker, means employment under his contract;

Defined in s.230(5) · see it in the full Act

(6) This section has effect subject to sections 43K , 47B(3) and 49B(10) ; and for the purposes of Part XIII so far as relating to Part IVA or section 47B, “worker”, “worker’s contract” and, in relation to a worker, “employer”, “employment” and “employed” have the extended meaning given by section 43K.

Defined in s.230(6) · see it in the full Act
week

“week”—

(a)

in Chapter I of this Part means a week ending with Saturday, and

(b)

otherwise, except in sections 27C, 75F, 75H, 80A, 80B , 80EA , 80EF , 80J and 86 and paragraph 11 of Schedule A1 , means, in relation to an employee whose remuneration is calculated weekly by a week ending with a day other than Saturday, a week ending with that other day and, in relation to any other employee, a week ending with Saturday.

Defined in s.235(1) · see it in the full Act
employer

(4) In this Act “employer”, in relation to an employee or a worker, means the person by whom the employee or worker is (or, where the employment has ceased, was) employed.

Defined in s.230(4) · see it in the full Act

(6) This section has effect subject to sections 43K , 47B(3) and 49B(10) ; and for the purposes of Part XIII so far as relating to Part IVA or section 47B, “worker”, “worker’s contract” and, in relation to a worker, “employer”, “employment” and “employed” have the extended meaning given by section 43K.

Defined in s.230(6) · see it in the full Act

Cases considering section 162 6

Graysons Restaurants Ltd v Jones & Ors

[2019] EWCA Civ 725 · 17 April 2019Limits

The provision was mentioned as an example of a statutory right using the week’s-pay calculation; it did not assist with the construction of arrears of pay. (see para [25])

Curr v Marks & Spencer plc

[2002] EWCA Civ 1852 · 13 December 2002

Sets the redundancy-payment calculation by reference to the period of continuous employment. The central dispute concerned how that period was computed. (see opening statutory discussion) Caps the period used for the redundancy-payment calculation at 20 years. It explained the maximum claim but was not otherwise construed. (see opening statutory discussion)

The Executor or Personal Representative of Iqbal Khan v A Vijendran

[2025] EAT 125 · 30 July 2025

The court applied section 162 as requiring calculation of statutory redundancy pay by reckoning backwards from the relevant date according to completed years of employment and age. The parties’ dispute concerned the factual inputs, especially the correct week’s pay. (see paras [18]-[19]; [24])

2 more judgments, and what each says about section 162, are in the case-law panel in the full Act.

Amendments and notes

5 notes from legislation.gov.uk

Amendments

  1. F863S. 162(4)(5)(8) repealed (1.10.2006) by The Employment Equality (Age) Regulations 2006 (S.I. 2006/1031), regs. 1(1), 49(1), Sch. 8 para. 32(2) (with regs. 44-46, Sch. 8 para. 33)
  2. F864Words in s. 162(6) substituted (1.10.2006) by The Employment Equality (Age) Regulations 2006 (S.I. 2006/1031), regs. 1(1), 49(1), Sch. 8 para. 32(3) (with regs. 44-46, Sch. 8 para. 33)
  3. F865Words in s. 162(6) substituted (1.8.1998) by 1998 c. 8, s. 1(2)(a) (with s. 16(2)); S.I. 1998/1658, art. 2(1), Sch. 1
  4. F866S. 162(7) repealed (15.12.1999) by 1999 c. 26, ss. 9, 44, Sch. 4 Pt. III para. 30, Sch. 9(2); S.I. 1999/2830, art. 2(2)(3), Sch. 1 Pt. II, Sch. 2 Pt. II (with Sch. 3 paras. 10, 11)

Modifications

  1. C180S. 162 modified (1.9.1999) by S.I. 1999/2277, art. 3, Sch. 2 Pt. I para. 3