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August 23rd, 2017
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Redundancy Pay Increase

Entered by: Heidi Rush @ 11:09:18 on 05/05/09

"To help provide adequate support for individuals who have been made redundant the Government announces a one-off increase in the level of statutory redundancy pay, making the weekly rate £380. The Government is also considering whether to introduce a new ‘floor’ which would set a minimum level for statutory redundancy payment rates, and would legislate on this in the next Parliament".

These may have been wise and well meant words from the Chancellor at the recent budget.  However, it makes no sense at all in the world of employment law, as there is no such thing as a weekly rate of statutory redundancy pay.

As an HR Consultant, I can only assume that what he is referring to is the maximum amount of a week's pay that is taken into account when calculating statutory redundancy pay.  So it appears he is saying this is to be increased from the current weekly amount of £350 to £380 per week. 

Assuming that is what the Chancellor meant, this increase will have little effect on some employees, due to the fact that  the annual salary of the employee will have to be in the region of £18,200 to £19,760.  Sadly, those employees earning a lower wage will still only be entitled to a statutory payment equivalent to their weekly pay.

Two other things that are not clear as a result of this announcement.  The first is whether this is a general increase in the maximum amount of a week's pay which can be taken into account for other purposes such as basic award on unfair dismissal remains to be seen and secondly, he has given no indication of when the new rate is to take affect.

Should you want further and clearer guidance on redundancies and restructuring programmes, give us a call.


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