News & Events

Redundancy – Paid Time Off

February 22, 2023

It’s easy to forget the fine details towards the end of a redundancy process. In this update we summarise rights about paid time off in a redundancy context. After all, as an employer you’ll have already spent a good amount of time considering matters before even embarking on such a process. Our employer clients don’t go into redundancy discussions with staff lightly. Even those on newsflashes for bad behaviour will have taken tactical decisions (even if they get it terribly wrong sometimes). However, there are some lesser-known details that can be missed towards the end of a redundancy or reorganisation process.

One of these details is the employee’s right to take a reasonable amount of paid time off. The right arises only once the employer has given the employee notice that their employment will end due to redundancy. Whilst it is only those employees who have more than two continuous years of employment with that employer who have the right, most employers extend the opportunity to all redundant staff.

Paid time off in a redundancy context is only for certain limited purposes. According to the legislation, it is only to be used for looking for other alternative work or to making arrangements for training. It isn’t “extra holiday”. Although technically the employee must ask for the time off, it cannot be unreasonably refused by the employer. In practice, the option for the employee to take paid time off happens smoothly by mutual agreement.

The amount of pay potentially available to the employee is a bit of a compromise. It is capped at 40% of a week’s pay and remember, only a “reasonable” amount of time off can be taken on this basis. Therefore, if the employee has a long notice period and needs to make lots of applications or travel further afield for interviews, the amount of pay available to them under this rule is fairly limited. Holidays might be granted as well of course or if a reasonable amount of partly paid time off has been exhausted, additional unpaid time off could also be agreed.

Although, if acting reasonably, an employer can refuse this kind of time off, in practise there are few conflicts over this issue. Where there are reported cases, it is where the employer has had suspicions over whether the request for time off genuine. Insight from years of advising employers through recessions and reorganisations, indicates that most have a good deal of sympathy for staff finding themselves in a genuine redundancy situation.

This is just a summary note and should not be relied on as legal advice. Specific advice should be taken in any given case.

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