Redundancy payments 'might rise soon'

06/02/2009

The minimum legal repayment on offer to people who lose their job is set to be raised by the government.

Sources speaking to the Independent newspaper said that a one-off rise to the limit could be announced ahead of this year's Budget by business secretary Lord Mandelson.

Under current UK law, redundancy pay is worked out on the basis of one week's pay for every year of service for most workers.

Employees aged over 41 years old get one-and-a-half week's pay as a statutory minimum.

However, salary income of above £350 a week is capped - and it is this threshold that would be raised by the government.

Currently, 46 per cent of the workforce earns more than this limit according to figures cited by the newspaper.

Raising the £350 cap was also the subject of a parliamentary motion signed by 57 MPs and launched yesterday.

Lindsay Hoyle, who tabled the motion, told the newspaper: "There has never been a more appropriate time.

"People at the top of the chain walk away with a £1 million cheque in their back pocket, but those at the bottom get a very raw deal. Even though the downturn is not their fault, they are thrown on the scrapheap."

Tags; Job loss, Recent Graduate Debt,

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