Am I entitled to redundancy pay as a company director?

You can only receive redundancy payments if you are an employee working under a contract of employment whether written, verbal or implied. As you were a director of the company, you will only be classed as an employee if you worked under a contract of employment.

Directors do not qualify for redundancy pay if they have a controlling interest in the company. Therefore, to qualify you need to:

• Have a shareholding of 50% or less in the company 
• work for 16 hours or more per week for the company 
• have been paid via company payroll under a PAYE scheme 
• have worked for the company for two or more years so that your relationship to the company is similar to that of other employees.

Directors do not qualify for redundancy pay if they only deal with company policy and attend board meetings in return for fees. Equally Self-employed people and members of a partnership do not qualify for redundancy pay either.

Beyond limited companies, self-employed business owners  and members of a partnership do not qualify for redundancy pay either. 

How do I claim redundancy pay? 

If you have established that you were an employee as well as a director using the conditions above, you can apply to the Insolvency Service for redundancy pay.  

You can check how much statutory redundancy pay you are entitled to here.  

Last updated 28 Jul 2026 | First published 5 Dec 2012

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