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Redundancy pay rate set to increase

Redundancy pay rate set to increase

The Government has published details of the annual increases to statutory redundancy pay, which will take effect from 6 April 2015. The maximum amount of a week’s pay for working out redundancy pay will increase to £475 from the current £464.

The changes mean that the maximum amount of statutory redundancy pay that an employee made redundant on or after 6 April 2015 will be able to receive will be £14,250. The annual increases used to be implemented on 1 February each year, but from 2014, the annual date of increase was changed to 6 April. The changes that take place to the rates annually are dependent on the retail prices index.

IBB advises businesses at the early stages of redundancy and re-structure decision-making. This allows us to ensure that the business considers all the options available to it at an early stage and has a clear understanding of what its objectives are, and how to achieve them.

It is important that redundancies are dealt with correctly – not only because of the legal consequences of not doing so – but also because of the effects that a badly handled redundancy process can have both on the staff who remain and your organisation’s reputation.

Compensation limits of employment tribunal awards set to change

The amount of compensation that employment tribunals can award for unfair dismissal also changes from 6 April. The maximum amount of a week’s pay for calculating the basic award of compensation for unfair dismissal will also rise to £475, from the current £464, for dismissals that take effect on or after 6 April 2015. This uplift is designed to compensate successful claimants for loss of job security and earnings, including lost salary, pension and other benefits.

The maximum compensatory award for unfair dismissal is increasing to £78,335 from the current £76,574. We can help you deal proactively with employment disputes before they result in an Employment Tribunal claim. To discuss an employment tribunal and dispute resolution please call our specialist employment law team on 01895 207892. Alternatively email your details to employment@ibblaw.co.uk

Separately, ACAS has published research that finds that 53% of claimants who had received pay awards granted to them by employment tribunals did not need to resort to enforcement channels, like bailiffs. However, ACAS claims, that more than nine out of 10 employers pay compensation without the need for enforcement following an ACAS-mediated settlement.

The study also found that 61% of settled disputes related to unfair dismissal followed by wages claims (13%). The average compensation pay-out was £3,000, while 80% of settled disputes were from the private sector with only 14% from the public sector and 5% in the charity or not for profit sector.

Employment law advice for employers

Find out how we can help you settle disputes and stay on the right side of the UK’s ever-changing employment law by calling our employment law solicitors on 01895 207892, or email your details to employment@ibblaw.co.uk.