What is the sum of money provided by an employer when an employee is made redundant?

The term that describes the sum of money provided by an employer when an employee is made redundant is redundancy payment. This payment is specifically designed to financially support employees who lose their jobs due to the position no longer being needed, often as a result of organizational changes, economic downturns, or company restructuring.

Redundancy payments serve as a form of compensation for the employee's tenure and can provide necessary financial assistance during the transition period to new employment. This payment is typically calculated based on the employee's length of service and salary.

In contrast, severance pay is often associated with layoffs or termination of employment under circumstances other than redundancy, such as performance-based dismissals. A retirement bonus may be provided to employees who reach retirement age but is not linked to redundancy situations. Lastly, a final paycheck includes wages owed for work performed prior to termination but does not encompass the additional financial support characteristic of redundancy payments.