Redundancy pay limit rises £380 on 1 October

The Government has confirmed an increase in the weekly limit used to calculate statutory redundancy pay from £350 to £380. This takes effect on 1 October 2009.  The Government has further confirmed the limit will not rise again in February 2010, remaining at £380 until February 2011.

The one-off increase, as announced in the 2009 Budget, intends to provide a stronger recession safety net for employees without placing too heavy a burden on employers.

An annual uprating formula, which has been applied each February since 1999 to raise the limit on a week’s pay in line with the Retail Prices Index (rounded to the nearest GBP10), will be suspended in 2010.

The weekly limit is used to calculate certain other types of payment eg the basic award for unfair dismissal.  The new weekly figure, and the October 1 increase, will also apply to those other payments.

For further information, please call our Employment Rights team on 033 3344 9600.