Counter-notice to notice of intention to claim a redundancy payment letter

Where an employee has been laid off or put on short time working, after a period of time it’s possible for them to try and claim a statutory redundancy payment.  The procedure is complicated but essentially you can serve a counter-notice to contest liability in certain circumstances.  Use our counter-notice to notice of intention to claim a redundancy payment in this scenario.

Meaning of lay-off and short time

For the purposes of this scheme, a week of lay-off occurs where no work is provided for the employee and they receive no pay for that week. A week of short time working takes place where the employee receives less than half a week’s pay for work done in that week. Statutory guarantee payments don’t count as pay for these purposes. Thus, if the employee is working a three-day week under a short time arrangement, this scheme shouldn’t trigger because the employee should be receiving 3/5ths of their pay.

When can an employee claim?

This statutory scheme enables your employee to claim a redundancy payment where they have been laid off or put on short time working either for at least four consecutive weeks or for a total of at least six weeks (no more than three being consecutive) in any 13-week period. The employee must first give you a written notice of their intention to claim a redundancy payment in respect of the lay-off or short time working.  The notice doesn’t need to be in a specific format as long as it indicates the employee’s intention to claim a redundancy payment. The notice must be given within four weeks of the last of the weeks of lay-off or short time working.

Counter-notice procedure

However, you can contest liability to make a statutory redundancy payment if you don’t wish to meet the employee’s claim.  In this case, you need to serve a written counter-notice within seven days of service of the employee’s notice.  As a minimum, your notice should state you intend to contest liability to make a redundancy payment.  It doesn’t have to set out details of the grounds on which a redundancy payment is opposed.  However, for your counter-notice to be upheld by an employment tribunal, you must be able to show that, as at the date of service of the employee’s notice, you reasonably expected to be able to provide a period of at least 13 weeks’ continuous service (i.e. without further resort to lay-off or short time working), to begin within four weeks of that date.  We’ve therefore included all this in our Counter-notice to Notice of Intention to Claim a Redundancy Payment Letter.  Be aware there can be no such reasonable expectation if the employee remains laid off or on short time for the whole of those four weeks.

What next?

Where you’ve served a valid counter-notice, the employee must apply to the employment tribunal to decide the matter if they want to take it further.  Assuming you don’t serve a counter-notice or you serve one but then withdraw it in writing, the employee must then terminate their contract of employment by giving you their contractual notice period or one week’s notice, whichever is greater.  This notice to terminate must be given within three weeks of your failure to give, or withdrawal of, a counter-notice (or, if the case has been contested, within three weeks of the employee being notified of the decision of the employment tribunal) but it doesn’t need to be in writing.

Contractual schemes

This procedure can only be used to claim statutory redundancy payments.  If you have a contractual redundancy payment scheme, these normally only operate where you’ve actually dismissed an employee for redundancy, but check your wording just in case.