What Is the Limitation Period for an Unpaid Redundancy Pay Claim?

An unpaid redundancy pay claim arises when an employee is entitled to statutory or contractual redundancy pay but has not received the full amount owed. This may occur where an employer becomes insolvent, disputes eligibility, miscalculates redundancy payments, or simply fails to pay.

The time limit for bringing a claim is strict and depends on whether the claim is made through the Employment Tribunal, the civil courts, or the statutory redundancy payment scheme. Understanding these deadlines is essential, as missing them can result in the loss of entitlement to payment.

What Counts as Redundancy Pay?

Redundancy pay generally falls into two categories:

1. Statutory redundancy pay

This is the minimum legal payment owed under the Employment Rights Act 1996. It is calculated based on:

• Age
• Length of continuous service
• Weekly pay (subject to a statutory cap)

2. Contractual redundancy pay

Some employment contracts provide enhanced redundancy payments above the statutory minimum. These are governed by the terms of the employment contract.

An unpaid redundancy pay claim may relate to either category.

Where Can an Unpaid Redundancy Pay Claim Be Made?

Claims for unpaid redundancy pay may be pursued through:

• Employment Tribunal
• Civil courts (in some contractual disputes)
• The government's statutory redundancy payment scheme (for insolvent employers)

Each route has different time limits and procedures.

Limitation Period in the Employment Tribunal

Three months less one day rule

For claims brought in the Employment Tribunal, the general limitation period is:

Three months less one day from the “relevant date”

The relevant date is usually:

• The date employment ended, or
• The date redundancy pay became due

This time limit applies to statutory redundancy pay claims under the Employment Rights Act 1996.

ACAS Early Conciliation

Before issuing a claim, most claimants must complete ACAS Early Conciliation. This process:

• Pauses the limitation clock while it is ongoing
• Allows a short extension after the certificate is issued
• Does not replace the underlying three-month time limit

Claims Through the Statutory Redundancy Payment Scheme

If an employer is insolvent, employees may claim unpaid statutory redundancy pay from the National Insurance Fund.

Key points include:

• Claims are made through the Insolvency Service
• There are strict time limits linked to the insolvency process
• Claims should generally be made as soon as possible after redundancy or insolvency confirmation

While not strictly a tribunal limitation period, delays can still affect eligibility and processing.

Limitation Period in the Civil Courts

Six-year limitation period

For contractual redundancy pay claims, the limitation period in the civil courts is:

Six years from the date of breach of contract

This is set out in the Limitation Act 1980.

When does the breach occur?

The breach usually occurs when:

• Contractual redundancy pay is not paid on termination
• Payment is made incorrectly or in part only
• The employer refuses to honour contractual redundancy terms

The six-year period normally begins on the termination date or the date payment should have been made.

Statutory vs Contractual Claims: Why It Matters

The applicable limitation period depends on the type of redundancy pay:

Statutory redundancy pay

• Tribunal route
• 3 months less 1 day time limit
• Governed by employment legislation

Contractual redundancy pay

• Civil court route
• 6-year time limit
• Governed by contract law principles

Identifying the correct basis of the claim is essential for determining the correct forum and deadline.

When Does Time Start Running?

The limitation period usually begins when:

• Employment ends due to redundancy
• Payment of redundancy pay becomes due under statute or contract
• The employer fails to make payment by the expected date

Complexity can arise where:

• Payments are made in instalments
• Employers dispute eligibility
• Insolvency proceedings affect payment timing
• There is ongoing grievance or appeal activity (which does not usually pause limitation)

Extensions and Exceptions

Employment Tribunal

Time limits may only be extended if:

• It was not reasonably practicable to bring the claim in time, and
• The claim was submitted promptly once possible

This is applied strictly and rarely succeeds.

Civil courts

The six-year limitation period is generally fixed, with very limited statutory exceptions.

Common Issues in Unpaid Redundancy Pay Claims

Disputes often arise due to:

• Incorrect calculation of statutory redundancy pay
• Misclassification of employment status or service length
• Disputes over continuous employment
• Failure to include bonuses or overtime in calculations (where applicable)
• Employer insolvency and delayed payment processes

Practical Steps When Redundancy Pay Is Unpaid

Where redundancy pay has not been received, typical steps include:

1. Confirming entitlement under contract and statute
2. Calculating statutory redundancy pay entitlement
3. Checking employment end date and payment due date
4. Identifying whether employer is solvent or insolvent
5. Determining the correct claim route (tribunal, court, or Insolvency Service)
6. Ensuring the claim is submitted within the limitation period

Risks of Missing the Limitation Period

Failure to act within time limits can result in:

• Loss of entitlement to statutory redundancy pay through tribunal
• Inability to recover contractual redundancy payments in court
• Rejection of claims by the Employment Tribunal
• Loss of priority in insolvency-related claims

Strict enforcement of limitation rules makes early action essential.

Key Takeaways

The limitation period for an unpaid redundancy pay claim depends on the type of entitlement:

• Statutory redundancy pay: 3 months less 1 day in the Employment Tribunal under the Employment Rights Act 1996
• Contractual redundancy pay: 6 years in the civil courts under the Limitation Act 1980

ACAS Early Conciliation can pause tribunal deadlines, but it does not extend them indefinitely. Correct identification of the claim type and prompt action are essential to preserving legal rights.