What payment am I entitled to on termination of employment?

Normally you should be paid full pay up to your last day of employment (known in law as the 'effective date of termination'), plus any untaken holiday pay, or outstanding overtime, commission or bonuses, depending on the terms of the organisation's scheme, as well as pension contributions up to the termination date. In addition, where your job is made redundant and you have sufficient service, you will be entitled to a redundancy payment.

The 'effective date of termination' is the legal name for the date your dismissal takes effect. It is the last day on which you are employed by your employer under your contract of employment. Your employer should notify you clearly of this date in the dismissal letter.

Take advice, for example from Citizens' Advice, if you are not sure of this date and you are considering a tribunal claim. This date is used for several important purposes in the employment tribunal, including calculating whether or not you have brought your claim in time, and is the cause of many failed tribunal claims.

Deductions from your final payment may be made where there has been an overpayment (for example, if you took more holiday than was due to you).

Your employer can only make deductions from your wages because you took more holiday than was due to you if you clearly agreed to this, in advance and in writing. Usually your agreement to deductions of this kind is found in your employment contract.

If you are on sick leave, even if you have exhausted your right to sick pay, you should be paid your full pay during any statutory notice period.

Note: This content is provided as general background information and should not be taken as legal advice or financial advice for your particular situation. Make sure to get individual advice on your case from your union, a source on our free help page or an independent financial advisor before taking any action.

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