Redundancy Pay for a Company Director

I recently ceased my Limited Company business and made all of my employees redundant. As I was dealing with the day to day running of the company am I also entitled to redundancy pay?

1st July 2008

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 presumably a director of the company, you will only be classed as an employee if you work under a contract of employment.

Also, directors do not qualify if they only have a controlling interest in the company. Therefore, for you to qualify you need to have a 50% shareholding or less in the company, and be working under a contract of employment, so that your relationship to the company is similar to that of other employees.

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

By Jo Nockels

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