Tax & Accounting News

Statutory Redundancy Pay increases

06/07/2009

The government has announced that the weekly rate of statutory redundancy pay will increase from £350 to £380 from 1 October.

This new rate is due to stay in place until February 2011, meaning there will not be the usual increase in February 2010.

The £30 increase was announced in this year’s Budget, and was introduced to give employees greater protection during the recession. Statutory redundancy pay has traditionally been increased in line with the Retail Price Index, and rounded to the nearest £10, although this practice will be suspended from 2010.

Statutory redundancy pay is calculated via a prescribed formula based on the employee's age, length of service (capped at 20 years' service), and weekly pay (which is currently capped at 350 GBP).

The increase will also apply in the Employment Tribunal when calculating the basic award in unfair dismissal claims.

For more information or advice please contact us.

 

Print page