You can claim up to 8 weeks' unpaid wages that you earned before the date of your redundancy. You can choose any week that is most beneficial to you - they do not have to be consecutive weeks. You cannot add part weeks together to make a whole week.
If you choose a week in which you are owed only one day's pay, this counts as a whole week of your 8-week allocation. The number of weeks (or part weeks) for which you were not paid (up to the 8-week limit) is multiplied by your weekly wage up to the statutory limit in force at the date of insolvency (£571 a week). If you are claiming a part of a weeks' pay, the weekly statutory limit is reduced proportionately. Wages payment includes:
- commission;
- overtime;
- statutory guaranteed pay days for time off under the temporary lay off and short-time working provisions;
- statutory payments for time off work or suspension from work on medical or maternity grounds;
- protective award made by an employment tribunal if your employer has failed to consult your representative about a collective redundancy.
You cannot claim unpaid maternity pay or sick pay from the Redundancy Payments Office under the insolvency rules. You claim maternity pay from Her Majesty's Revenue & Customs and sick pay from the Department of Working Pensions.
The '12-week period'
When you calculate your week's pay, you may have to average your pay and hours over a 12-week period. These 12 weeks must be the last full 12 weeks that lead up to the reason you need to calculate your pay, for example:
- to calculate pay during time off for job-hunting, use the 12-week period leading up to the day you were first given your redundancy notice
- to calculate notice pay, use the 12-week period leading up to the first day of the notice period
- to calculate paid annual leave, use the 12 weeks leading up to your holiday
- to calculate guarantee payments, you should normally use the 12 weeks leading up to when your payment is due; if you no longer work for that employer use the last 12 weeks of your employment
If you did not receive pay for work during the 12-week period (for instance you received holiday pay), you should use the previous week in your calculation. For example, if during the 12-week period you did not receive pay for three weeks you should look at a 15-week period and only include those weeks you were paid for work.
Calculating basic fixed wages, salary or hourly rate
If you have the same pay every week or month then your weekly pay will be your pay for your basic contract hours. Any bonuses or allowances (except an expense allowance) which do not vary with the amount of work you do can also be included in calculating your week's pay.
If you are paid by week then the amount you are paid is your weekly pay.
You can't include overtime hours when calculating your week's pay unless your employer must pay it to you under your contract of employment.
Working outside your normal work hours
If you do some work outside of the hours you normally work, for example voluntary overtime, it can be included when calculating your average week's pay. However if you are paid a higher overtime rate for work that could be done in normal hours, the higher rate of pay can't be used when calculating your week's pay.
No normal working hours
If you have no normal working hours your amount of week's pay is your average pay over the 12-week period leading up to the time that you need to calculate for. For example a sales rep paid by commission.
If, for example, you are being made redundant, you should use the last 12 full weeks you worked leading up to the day you were given notice of your redundancy.
If you receive no pay one week, then you should look at the week before. For example, if you are looking at a 12-week period, but you did not receive any pay during three weeks of that time, you should look back for 15 weeks.
