The Trades Union Congress (TUC) is calling for the government to increase the weekly limit on statutory redundancy pay from £330 to £500.
Anyone who has worked for the same employer for more than two years is entitled to redundancy pay. It is calculated as half a week’s pay for each year of employment between the ages of 18 to 21; plus one week’s pay for each year of employment between 22 to 40; plus one and a half week’s pay for each year of employment between the age of 41 or over but under 65. No more than twenty years service can be counted.
The TUC wants the government to raise the statutory cap on what counts as a week’s pay. According to the TUC, 53% earn more than the £330 allowed per week.
When redundancy pay was introduced for the first time in 1965 the limit was set at £40, more than twice the average wage (£19.60). The TUC claim that if the limit had been raised in line with prices it would now be a little over £500, and if increased in line with earnings it would now be in excess of £1,000.
TUC general secretary Brendan Barber said: “The Government pledged in its manifesto for the last election to boost redundancy and that pledge should be implemented. A one-off rise to £500 and a link to earnings rather than prices in future is the minimum we need to see to start to restore some fairness.”
