Increase in redundancy pay in new budget

Hidden taxes, some good and bad, the 2009 budget speech has been in the spotlight as the global ecocomy struggles to rally.

For employers facing slowing order books, there was an important announcement by Mr Darling as he has increased the maximum statutory redundancy payment. An employee's statutory redundancy pay is calculated by using a formula that takes into account their age and length of service.

This formula results in a number of weeks' pay, which is then multiplied by the employee's weekly pay subject to a maximum of, currently, £350 per week. This figure will now rise to £380.  The unions are not happy with the increase as they were lobbying for £500 per week – an increase that could potentially cripple employers.

Companies need to be aware of recent changes to employment legislation or face huge fines.  For smaller companies making 20 or less redundancies, we have written a step by step Redundancy Action Plan to help you avoid the risks of getting it wrong.

Contact Katherine Wiid for confidential advice on redundancies on 01780 484910 or download our free videos taking you through the 20 most frequently asked questions about redundancy.