Enhanced redundancy pay means your employer promises to pay you more than the legal minimum if they make you redundant. For example, instead of the statutory 1 week's pay per year of service (UK), they might offer 2 weeks' pay per year. This is attractive because redundancy is often sudden and financially painful. Legally, this matters because it's a binding promise—your employer can't later claim they can't afford it. The principle: once written into your contract, enhanced redundancy becomes a legal obligation, not a gift.
This is genuinely good for you, so accept it—but read carefully to understand the exact formula (weeks per year of service, how "week's pay" is calculated, any caps). Check whether the enhanced amount applies if you're made redundant for misconduct (it usually doesn't). Also confirm: does this apply if the company is taken over, or only in traditional redundancies? Get it in writing and keep a copy. ---
Frequently Asked Questions
What does this clause mean in simple terms?
Enhanced redundancy pay means your employer promises to pay you more than the legal minimum if they make you redundant.
Why should I care about this clause?
For example, instead of the statutory 1 week's pay per year of service (UK), they might offer 2 weeks' pay per year.
What are my options?
This is attractive because redundancy is often sudden and financially painful.
How does this affect small businesses?
Legally, this matters because it's a binding promise—your employer can't later claim they can't afford it.