How to Claim Unpaid Notice Pay After Redundancy

When employment ends due to redundancy, employees are usually entitled to a notice period or payment in lieu of notice. If an employer fails to pay notice pay correctly or withholds it entirely, this may amount to unlawful deduction from wages or breach of contract under UK employment law.

In England and Wales, entitlement to notice pay is primarily governed by the Employment Rights Act 1996, alongside the terms of the employment contract. Where payment is missing or incorrect, employees may pursue recovery through internal processes, statutory claims, or an employment tribunal.

This guide explains how to identify unpaid notice pay, the steps required to claim it, and the legal routes available for recovery.

What Unpaid Notice Pay Means

Unpaid notice pay occurs when an employer fails to provide payment for the notice period an employee is legally or contractually entitled to receive after redundancy.

This can include:

• No payment for the statutory notice period
• Incorrect calculation of notice pay
• Failure to include regular earnings such as overtime or commissions
• Partial payment of notice instead of full entitlement

Notice pay is separate from redundancy pay and holiday pay, although all may arise at the same time.

Legal Basis for Notice Pay Entitlement

Employees may be entitled to notice pay under:

Statutory notice rights

Under the Employment Rights Act 1996, employees are entitled to minimum notice based on continuous service:

• At least 1 week after 1 month's service
• 1 week per year of service between 2 and 12 years
• Capped at 12 weeks' notice

Contractual notice rights

Employment contracts may provide longer notice periods than the statutory minimum. Where this applies, the contractual term prevails if more favourable.

Payment in lieu of notice (PILON)

If employment ends immediately, the employer may make a lump sum payment covering the notice period.

Step 1: Check Your Entitlement

The first step in making a claim is confirming whether notice pay is actually owed.

Review:

• Your employment contract for notice terms
• Your length of continuous service
• Whether notice was worked or paid in lieu
• Payslips covering the termination period

Common issues include employers miscalculating service length or failing to include contractual enhancements.

Step 2: Identify the Type of Non-Payment

Unpaid notice pay usually falls into one of the following categories:

Full non-payment

No notice pay has been provided at all.

Underpayment

Notice pay has been paid but is lower than legally required.

Miscalculation

Errors in service length, pay rate, or inclusion of earnings such as overtime or bonuses.

Improper deductions

Unlawful deductions from notice pay, such as repayment demands not permitted by contract or law.

Step 3: Raise the Issue Informally

Before escalating a claim, it is standard practice to raise the issue directly with the employer.

This may include:

• Writing to HR or payroll requesting clarification
• Asking for a breakdown of how notice pay was calculated
• Highlighting discrepancies between contract terms and payments received

Many disputes are resolved at this stage without formal proceedings.

Step 4: Submit a Formal Grievance

If informal resolution fails, a formal grievance may be appropriate.

A grievance should:

• Clearly state the issue (unpaid or incorrect notice pay)
• Provide supporting evidence (contract, payslips, termination letter)
• Request a formal review and correction of payment

Employers are expected to handle grievances reasonably under the Acas Code of Practice, and failure to do so may affect tribunal outcomes.

Step 5: Consider ACAS Early Conciliation

Before bringing most employment tribunal claims, the Acas Early Conciliation process must be initiated.

This involves:

• Notifying Acas of the dispute
• Attempting settlement discussions with the employer
• Receiving an Early Conciliation certificate if no agreement is reached

This step is mandatory for tribunal claims related to unpaid notice pay.

Step 6: Bring an Employment Tribunal Claim

If the issue remains unresolved, a claim may be submitted to an employment tribunal.

Common legal routes include:

Unlawful deduction from wages

Used where notice pay is classed as wages and has not been paid correctly.

Breach of contract

Used where contractual notice terms have not been honoured (often available in tribunal for claims arising from termination).

Wrongful dismissal

Used where notice pay is not provided following termination without proper notice or payment in lieu.

Step 7: Time Limits for Claims

Strict time limits apply:

• Most tribunal claims must be brought within 3 months minus one day of the termination date or last underpayment
• ACAS Early Conciliation pauses the limitation period temporarily

Missing the deadline may prevent recovery of unpaid notice pay.

Step 8: Evidence Required for a Claim

Successful claims usually rely on documentary evidence such as:

• Employment contract showing notice entitlement
• Payslips before and after termination
• Redundancy or dismissal letter
• Communication regarding payment in lieu of notice
• HR correspondence or grievance documents

Clear documentation strengthens the claim and supports accurate calculation of loss.

Step 9: How Notice Pay Is Calculated in Claims

Tribunals typically assess notice pay based on:

• Gross weekly earnings (including regular overtime and contractual bonuses where applicable)
• Length of statutory or contractual notice
• Any payments already made by the employer

If payment in lieu has been made incorrectly, the tribunal may order the shortfall to be paid.

Step 10: Common Employer Defences

Employers may argue:

• Notice was correctly worked or paid in lieu
• Contractual clauses exclude certain payments
• Service length was lower than claimed
• Deductions were authorised under contract

Tribunals assess whether these defences are supported by evidence and consistent with statutory rights.

Step 11: Related Claims Often Linked to Notice Pay

Unpaid notice pay claims often overlap with:

• Statutory redundancy pay disputes
• Unfair dismissal claims
• Holiday pay claims
• Discrimination claims affecting dismissal process

Each claim has separate legal tests but may arise from the same redundancy situation.

Key Takeaways

Claiming unpaid notice pay after redundancy involves confirming entitlement under statutory or contractual rules, identifying underpayment or non-payment, and following a structured dispute process. Most claims begin with informal resolution or grievance procedures before progressing to ACAS Early Conciliation and potentially an employment tribunal. Strict time limits apply, and evidence of contractual terms and earnings is essential to support recovery.