Below are answers to the most frequently asked UK redundancy questions, based on current employment law and updated for April 2026.
Is redundancy pay taxable? Genuine redundancy and other qualifying termination payments are generally exempt from income tax up to £30,000 combined. Notice pay and holiday pay are normally taxed as earnings. Check GOV.UK.
What is PILON? Pay In Lieu Of Notice means your employer pays the salary you would have earned during your notice period but your employment ends immediately. PILON is fully taxable and subject to National Insurance.
Can I be made redundant while on sick leave? Yes, but your employer must still run a fair consultation process and make reasonable adjustments to how they communicate with you. If you were selected because of a disability-related absence, this may be disability discrimination.
Can I be made redundant while pregnant? Yes, but in Great Britain pregnant employees who have notified their employer may have priority for suitable alternative vacancies where one exists. Selection because of pregnancy may be automatically unfair and discriminatory. Northern Ireland rules differ.
Can my employer make just me redundant? Yes, if your specific role is no longer required. They must still consult with you individually before making a final decision.
How long does consultation have to be? In Great Britain, fewer than 20 proposed redundancies have no fixed statutory consultation period. For 20–99 proposed at one establishment within 90 days, collective consultation must start at least 30 days before the first dismissal; for 100 or more, at least 45 days.
What is garden leave? You remain employed and fully paid during your notice period but are told not to come to work. You cannot start a new job or contact clients during this time.
What is Acas Early Conciliation? In Great Britain, normally notify Acas before a tribunal claim unless exempt. Many claims have a three-month-less-one-day limit, but the start date varies and early conciliation affects the clock; Northern Ireland has a separate process.
What is TUPE? Transfer of Undertakings (Protection of Employment) — your employment automatically transfers to a new employer on the same terms if the business is sold or a service is outsourced. You cannot be made redundant simply because of the transfer.
What is a settlement agreement? A legally binding contract where you waive employment claims in return for a financial payment. You must receive independent legal advice for it to be valid, and your employer usually covers the legal fee.
Can I negotiate my package? Statutory pay is fixed, but you can negotiate any enhanced payment, the reference wording, your leaving date, and whether you keep equipment such as a laptop.