Redundancy is a form of dismissal from your job. This happens when an employee’s services are no longer required or when the job they do becomes obsolete.
Just like any other employee, Nannies are entitled to redundancy pay if they have worked for two or more years for an employer and the employer decides they no longer need a nanny. Redundancy is a difficult time and many smaller employers are not aware of the legalities around redundancy and the process of making a Nanny redundant. It is important for Nannies to understand their rights and that Employers are aware of their responsibilities.
Families’ circumstances can change which means they may no longer require your services as their nanny. An example could be that all children are at nursery and school and therefore a reduction in hours is needed. If the family would like to reduce the hours of the role, they need to offer this ‘newly structured’ position to you, their existing nanny. If you as the Nanny do not wish to take the role with the new hours and new contract then you will be entitled to redundancy pay, providing you have completed two or more years of continuous employment with the family.
As a nanny do I qualify for Redundancy pay?
To qualify you must:
- Have two years of continuous employment with the same family
- Be a working employee with a PAYE Scheme and hold an employment contract (this includes written and verbal contracts)
How much will I receive in Redundancy Pay?
You will normally be entitled to a minimum of statutory redundancy pay. This will be based on your length of service with the family and your age.
Redundancy pay is based on:
- Your earnings before tax (gross salary)
- Your age
- The amount of years you have worked for your employer
If you are aged 22 or under – your employer must give you half a week’s pay for each full year you have worked.
If you are aged 22 – 40, you are entitled to one weeks pay for every year of service.
If you are aged 41 – to retirement age, you are entitled to one and a half weeks pay for every year of service.
You may get more than the statutory amount (this is the minimum amount the law states you should get) if it is included in your contract. A nanny is legally entitled to the statutory amount, but your employer is free to pay more than the statutory requirement if they wish to do so.
Can you be made redundant if you are pregnant or on maternity leave?
You can be made redundant while pregnant or on maternity leave, but employers need to tread carefully in this area as there are strict rules and processes to follow. You cannot be made redundant for the reasons of being pregnant or on maternity leave as this is seen as unfair dismissal and discrimination. A Nanny can be made redundant while on maternity leave if the job genuinely no longer exists. As with any redundancy situation, a Nanny should be offered a suitable alternative employment if a family has the option available.
Limits to redundancy pay
You can only get redundancy pay for up to 20 years of work. For example, if you have worked for your employer for 25 years or more, you will only get redundancy pay for 20 of those years.
What happens if your employer does not pay you?
If you do not receive your redundancy pay, you should make an appeal to an employment tribunal and this should be done within 6 months that you were entitled to receive payment otherwise you may lose the right to payment.
Do I pay tax on my Redundancy payment?
Statutory redundancy pay under £30000 is not taxable.
How can I calculate my redundancy pay?
You can visit the GOV website which has a useful calculator and further details: https://www.gov.uk/calculate-your-redundancy-pay
For more information on redundancy and the process, please visit https://www.acas.org.uk/
