Increase statutory redundancy pay on the cards
The Employment Rights Act 1996 entitles employees to statutory redundancy payments after they have two years continuous service. Such payments are calculated based on an individual employee's age, length of continuous service and weekly pay currently capped at £350 per week.
A private members bill has recently been introduced by Lindsay Hoyle MP who is attempting to link statutory redundancy payments to average earnings. Mr Hoyle's arguments are that the value of statutory redundancy pay has decreased in real value over the years and that this entitles Employers to get rid of Employees on the cheap. It is proposed that the weekly cap on a week's pay is increased to £500 and the bill has recently passed its first hurdle in the House of Commons.
Understandably the bill is not supported by the government or the wider business community, and the British Chamber of Commerce has said that, if successful, the bill could impact on struggling firms who are already suffering cash flow problems in the current climate. It remains to be seen whether the bill will get through the committee stage.
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