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Redundancy pay limit to increase to GBP380 in October

9th June 2009

The Government has confirmed that the increase in the weekly limit for the purpose of calculating statutory redundancy pay, will take place on 1 October 2009.

The rise from £350 to £380 was announced in the 2009 Budget in April but there had been no official confirmation as to when the increase was to come into force, until today. The limit will not rise again in February 2010, as it would usually do, instead remaining at £380 until February 2011.

The Government announced a one-off increase in the limit of £30 in the 2009 Budget. The increase is intended to provide a stronger safety net for employees in the recession without placing too heavy a burden on employers.

Since 1999, an annual uprating formula has been applied each February to raise the limit on a week’s pay in line with the Retail Prices Index rounded to the nearest £10. This uprating will be suspended in 2010. As well as statutory redundancy pay, the weekly limit will also apply when calculating certain other types of payment, such as the basic award for unfair dismissal and other claims such as failure to consult on collective redundancies.

Further Information:

The Work and Families (Increase of Maximum Amount) Order 2009 - Final Impact Assessment (PDF format, 169K) Confirmation that the increase in the weekly limit for statutory redundancy pay will come into force on 1 October 2009 is available on the Department for Business, Innovation and Skills website.

Pearson Hinchliffe Commercial Law can help you with employment law, especially providing advice on managing redundancies.

Click here to speak to a specialist employment lawyer.


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