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Am I entitled to redundancy on a fixed term contract?

Am I Entitled To Redundancy On A Fixed Term Contract

If you’re working on a fixed term contract with a specified end date, or one that finishes when you’ve completed the work or project required, you may be able to claim redundancy and other statutory entitlements.

In most instances, working under a fixed term contract means the employer must treat you in the same way as a comparable permanent employee, but whether or not you’re entitled to claim redundancy depends on the length of time you’ve worked for that employer.

Redundancy and fixed term contracts

When a fixed term contract comes to an end and is not renewed, this may be because the project is complete and there are no other business reasons to continue. Alternatively, the business may be experiencing a downturn, making redundancies a possibility, in which case you could have redundancy rights as an employee.

This depends on the length of your contract, however. If you’ve worked for this employer for two years or more on a continuous basis, you are entitled to the same redundancy benefits as permanent members of staff. This also applies if you’ve worked under contracts of shorter duration for the same employer, and they continued without a break.

What are your redundancy rights as a fixed term employee?

As long as the two-year continuous employment threshold has been reached, your entitlements in redundancy are the same as those of permanent employees, and your level of redundancy pay should not differ.

You’re entitled to redundancy pay, arrears of wages, outstanding holiday pay, and pay in lieu of notice, and you should be provided time to search for another job as well as receiving the job search support offered to permanent employees in this situation.

Exceptions can occur, however, and in some cases the employer may be able to put forward a justifiable reason for differences in treatment of their employees - where a fixed term employee never believed their contract would be renewed, for example.

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Zero hours contracts and redundancy

If you’re on a zero hours contract you’ll be categorised as a ‘worker’ or an ‘employee.’ If you’re an employee you have more employment rights than a worker, and this includes statutory redundancy pay should you meet the qualifying conditions.

As with fixed term employees, you may be eligible for redundancy pay and other statutory entitlements on a zero hours contract if you’ve worked continuously for your employer for two years or more.

Redundancy pay for fixed term and zero hours contracts

As with employees on permanent contracts, statutory redundancy pay for fixed term and eligible zero hours contracts is calculated using length of service, age, and weekly wage. Certain elements of this calculation are capped by the government - length of service and weekly wage are currently capped at 20 years and £508 respectively (2018-19 tax year).

Employment contracts and entitlements in employment can be a particularly complex area of business and if you’re unsure as to your rights in redundancy our experts at Redundancy Claims UK can help. Please contact one of the team to arrange a free consultation.

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