SE13775 - Termination payments and benefits: non- statutory redundancy payments: general

Many employers make redundancy payments under non- statutory schemes and arrangements. They include:

• schemes authorised by the Secretary of State for Employment under Section 157 Employment Rights Act 1996.These schemes are a substitute for the statutory payments under the Employment Rights Act 1996 (see SE13760) and are at least as high as them
• general schemes providing payments to employees who are not covered by Employment Rights Act 1996 entitlements (for example, Civil Servants and National Health Service employees)
• schemes providing payments in addition to statutory payments
• general schemes not tied to any specific redundancy situation (for example, one expressed in general terms embracing redundancies as they occur)
• schemes to meet specific redundancy situations (for example, the imminent closure of a particular factory)

SE13760 explains that statutory redundancy payments are specifically brought within Section 148 ICTA 1988 by Section 579 ICTA 1988. That cannot apply to these non- statutory schemes. Nevertheless, they fall only into Section 148 ICTA 1988 following the decision in Mairs v Haughey (66 TC 273) STC569): see SE13750.

Statement of Practice 1\1994:

• explains the Revenue’s practice concerning non-statutory redundancy payments: see SE13785 and
• invites employers to submit proposed non-statutory schemes for “advance clearance” that Section 148 ICTA 1988 applies: see SE13790