Unite backs increase to statutory redundancy pay

06 March 2009

Business

Unite has backed calls for higher statutory redundancy pay as it warns that the gap between redundancy remuneration and real earnings is growing.

A Bill is currently being drawn up by Lindsay Hoyle MP pushing to change the "outdated" method of calculating redundancy pay and to end the £350-a-week cap.

Unite assistant general secretary Tony Burke said that the payments calculated under the current state formula have not kept their value since it was introduced in 1965.

"State terms are now only around half of average earnings. During the recent glut of job losses in printing, many members losing their jobs have received only the state terms. In some cases, they have had to wait for their state redundancy pay as the firm has gone bust," he said.

Currently, the state offers a week's pay for each full-year's service to employees between the ages of 22 and 41. Older workers receive a week-and-a-half’s pay per year, up to a maximum of £350 a week for up to 20 years' service.

Unite said that the £350 cap was equivalent to 56% of average weekly earnings, compared with 203% when it was introduced.

Over 130 Labour MP's have now put their names to a Commons motion backing the Bill.