Redundancy payments—effect of death of employer or employee
Redundancy payments—effect of death of employer or employee

The following Employment guidance note provides comprehensive and up to date legal information covering:

  • Redundancy payments—effect of death of employer or employee
  • Death of the employer
  • Subsequent death of employee

Death of the employer

At common law, where an employer is a natural person (as opposed to a legal person, such as a corporate entity or partnership), the death of the employer frustrates and so terminates the contracts of employment of all the employer’s employees.

The Employment Rights Act 1996 (ERA 1996) deems the frustration of the contract by the employer’s death to be a dismissal by reason of redundancy.

For further guidance on redundancy generally, see: Redundancy—overview.

Accordingly, an affected employee is potentially entitled to a redundancy payment from the deceased’s estate. However, the general policy of ERA 1996 is that continued employment is preferable and so the statutory redundancy scheme is modified: if the employee accepts continued employment with the deceased’s personal representatives, then the deemed dismissal ‘vanishes’, subject to a statutory trial period where appropriate.

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