In the 2009 Budget, the Government announced its intention to increase statutory redundancy pay from £350 to £380. This increase will take effect on 1st October 2009 in Great Britain and Northern Ireland. The figure for the weekly redundancy limit is also used for a range of other compensation payments which will also increase as of the same date.

The annual uprating exercise, which provides for the weekly limit to be adjusted each February in line with the retail price index, will be suspended in February 2010. The suspension means the limits introduced on 1st October 2009 will remain the same until February 2011.

The additional cost to businesses is estimated at £80-125 million based on a total of 850,000 predicted redundancies.

Employment provisionOld limit
01/02/09New limit
01/10/09

Maximum cap or limit on a compensatory award for unfair dismissal where the EDT (Effective Date of Termination) falls on or after 1st February 2009, irrespective of when an employment tribunal might undertake its remedy hearing. £66,200 £66,200
(no change)
Minimum amount of basic award where dismissal is as a result of trade union membership/activities or representation responsibilities in respect of health and safety, consultation on collective redundancies/transfers of undertakings, pension trustee duties or working time issues £4,700 £4,700
(no change)
Minimum amount of compensation awarded by the Employment Appeal Tribunal where individual excluded or expelled from union in contravention of Section 174 of the Trade Union and Labour Relations (Consolidation) Act 1992. £7,300 £7,300
(no change)
Limit on amount of guarantee payment payable to an employee in respect of any day. £21.50 £21.50
(no change)
Limit on amount in respect of any one week payable to an employee in respect of a debt to which Part XII (Insolvency) of the Employment Rights Act 1996 applies and which is referable to a period of time. £350 £380
Maximum amount of “a week’s pay” for the purpose of calculating basic and additional awards of compensation for unfair dismissal or redundancy payments. £350 £380
Maximum redundancy payment/basic award at employment tribunal £10,500 £11,400
Range of additional awards at employment tribunal 9,100 – £18,200 £9,880 -£19,760