What changes at 2 years
Before 2 years of continuous service:
- No statutory redundancy pay — the £30,000 tax-free threshold is irrelevant because there's nothing to put inside it
- Limited unfair dismissal protection — you can claim only in specific protected categories (discrimination, whistleblowing, asserting statutory rights)
- Statutory minimum notice = 1 week for the first month-to-2-years period
At 2 years of continuous service:
- Statutory redundancy pay starts — minimal at this level, but the financial floor exists
- General unfair dismissal protection activates — any dismissal must follow a fair process
- Statutory minimum notice = 2 weeks (1 week per year from year 2 onwards)
- Right to time off to look for work (paid in some circumstances)
The shift at 2 years is more legal than financial. The redundancy pay difference between 1 year, 11 months and 2 years exactly is around 1 week's pay; the difference in protections is much larger.
Statutory redundancy at exactly 2 years
The calculation:
- 2 full years of service
- Most employees at 2 years are aged 22+ → 1 week per year
- Weekly pay capped at £719 for 2026/27
- Result: 2 × 1 × £719 = £1,438 maximum
For someone earning under £37,388 a year (weekly pay below the £719 cap), it's 2 × actual weekly pay:
- £25,000 salary → 2 × (£25,000/52) = 2 × £481 = £962
- £30,000 salary → 2 × £577 = £1,154
- £40,000 salary → 2 × £769 → capped at £719 each = £1,438
The maximum statutory at 2 years is £1,438 — the £719 cap bites for anyone earning above £37,388.
What 2-year unfair dismissal protection means
Unfair dismissal is a statutory claim. To succeed, you need to show:
- You were dismissed (or constructively dismissed)
- The reason was not a fair statutory reason (redundancy, capability, conduct, illegality, "some other substantial reason")
- The procedure followed was not fair
Redundancy IS a fair statutory reason — but the procedure must still be fair. Fair procedure means:
- Real consultation with you about the proposed redundancy
- Application of fair selection criteria (if pool-based)
- Consideration of alternatives (redeployment, training, etc.)
- Written notice with the termination date
If the process is materially flawed — no consultation, predetermined outcome, biased selection, sham redundancy — you may have an unfair dismissal claim. The compensation can substantially exceed the statutory redundancy alone.
Common unfair-dismissal red flags
- The "consultation" is a single meeting where the outcome is already announced
- The selection criteria are vague or applied inconsistently
- You're singled out while colleagues in equivalent roles are retained without explanation
- Alternative roles within the business are not offered
- The decision was clearly made before the formal process started
- You raised a grievance or complaint shortly before the redundancy was announced
If any of these apply, settlement agreements often appear. The employer is buying out the risk of a tribunal claim — your settlement offer should reflect this.
Service-counting nuances
Continuous service usually includes:
- Probation period (even if shortened)
- Sickness absence (paid or unpaid)
- Maternity, paternity, adoption leave
- Annual leave
- Strike action (under specific conditions)
- TUPE transfer from a previous employer
What can break continuous service:
- A genuine gap of one week or more between contracts (no exceptions)
- Termination followed by re-engagement on materially different basis
- Self-employed or contractor periods don't count toward employee service
If you're at 1 year 11 months and being told the redundancy is "amicable," the cost to the employer of waiting 5 weeks longer is around £1,500 plus full notice — meaningful but not enormous. Worth raising in writing.
Worked example — 2 years' service, £35,000 salary, age 28
Statutory redundancy: - Weekly pay: £35,000 / 52 = £673 (under the £719 cap) - Age 28 → 1 week per year - 2 × £673 = £1,346 statutory
Notice: - Statutory minimum = 2 weeks - 2 × £673 = £1,346 notice pay (taxable + NI'd)
Total redundancy package floor: - Redundancy: £1,346 (tax-free) - Notice: £1,346 (fully taxed) - Holiday accrued (assume 1 week): £673 (fully taxed) - Net: roughly £1,346 + £970 (notice net at ~72%) + £484 = £2,800 net
Modest but not nothing. The unfair-dismissal protection layer is the bigger story.
If you're at 22+ months and worried about timing
Three reasonable approaches:
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Document everything. Keep written notes of conversations, instructions, and the timing of any announcements. If the redundancy crystallises early, your contemporaneous notes are valuable.
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Stay on payroll if you can. If the offer is "voluntary redundancy now at less than statutory + notice," generally refuse and let the formal process play out. Voluntary acceptance can sometimes weaken later claims.
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Get specialist legal advice if the timing looks suspicious. Many employment solicitors offer fixed-fee initial consultations. If the redundancy is genuinely contrived to avoid the 2-year threshold, that's potentially discriminatory or constructive dismissal territory.
What to do at the 2-year mark
If you've just crossed 2 years and a redundancy is announced:
- Confirm the calculation. Statutory should be at least 2 weeks × weekly pay (capped at £719).
- Check the procedure. Is there a documented consultation? Are selection criteria written down? Is there evidence of alternatives considered?
- Verify notice. Should be at least 2 weeks (or contractual notice if longer).
- Don't accept a "voluntary redundancy" rate below statutory + notice + holiday. You're not obliged to.
- Consider whether to push back. At 2 years exactly, you have unfair dismissal protection. Use it as leverage if procedure is flawed.
In short
Two years of continuous service is when UK redundancy protections begin. Statutory pay is modest (around £1,000–£1,500 for typical salaries), but the unfair-dismissal protection that activates at the same point is the more meaningful change. For the full statutory formula, see statutory redundancy pay →. For broader context, see the redundancy hub →.