Redundancy and unfair dismissal compensation payments to rise

Redundancy and unfair dismissal compensation payments to rise

From 1 October 2009, the maximum statutory amount that employers must pay for redundancy and unfair dismissal claims is due to increase.

The maximum amount of ‘a week’s pay’ for employees made redundant, or who succeed in a claim for unfair dismissal, will increase from £350 to £380 per week. The amount is usually increased in February each year, but next year’s increase has been brought forward to help employees being made redundant in the current economic climate.

As a result, the next annual increase of the amount will not be made until February 2011. In addition, Acas has recently updated its guidance on redundancy handling, which emphasises:

• the importance of planning labour requirements to avoid or to minimise the need for redundancies;
• the benefits of establishing an agreed procedure for handling redundancies; and
• the need for fairness and objectivity when selecting members of the workforce for redundancy.

The booklet also considers the practicability of offering redundant employees alternative work, counselling or other assistance.

• Download the ‘Redundancy handling’ booklet from the Acas website

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