What happens if my boss refuses to pay my redundancy money in England?

The situation

I am writing to ask for some advice regarding my former workplace in Manchester. I worked as a junior administrator for a small logistics firm for about three years. On the 12th of October, my manager sat me down and told me that because the company was struggling with recent losses, my role was being made redundant. They promised me a redundancy payment of £2,500 to cover my notice period and statutory rights, which I expected to receive by the end of the month. However, when I checked my bank account last Friday, nothing had been paid. I sent a polite email to the director explaining that I was counting on this money to pay my rent, but he replied quite rudely, claiming that they don't actually owe me anything because they haven't officially closed the business yet. I have already tried speaking to my union representative, but they told me I need to figure out how to get a formal decision on whether the company is actually liable for this sum. I am confused about how I can actually force them to pay or get someone to decide if this was a genuine redundancy or just a way to get rid of me without paying up.

Detailed Analysis

Under the law, an employer must pay a redundancy payment if an employee is "dismissed by the employer by reason of redundancy"^[1]. Redundancy is a type of dismissal that happens when an employer no longer needs a specific job to be done. In your case, your manager told you on 12 October that your role as a junior administrator was being made redundant due to company losses.

Because your employer is now disputing whether they owe you the £2,500, you can use an employment tribunal to settle the argument. An employment tribunal is a specialized court that hears disputes between employers and employees. According to the law, if a claim is made regarding an employer's liability for a redundancy payment, there shall be referred to an employment tribunal "any question as to the liability of the employer to pay the employer’s payment"^[2]. This means the tribunal can officially decide if the company actually owes you the money or if the dismissal was not a genuine redundancy.

Crucially, the law provides a starting point for your case: "an employee who has been dismissed by his employer shall, unless the contrary is proved, be presumed to have been so dismissed by reason of redundancy"^[2]. This means the burden is on your former employer to prove that your dismissal was for some reason other than redundancy.

It is currently uncertain whether the company's claim that they do not owe you anything because they "haven't officially closed the business yet" has any legal merit, as the statutes provided do not state that a business must be closed for redundancy payments to become due. Additionally, the tribunal will decide the exact amount owed if they find the employer is liable^[2].

Note that local or specific contract terms may add further rules to your situation.

Statutory Citations

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