Redundancy Pay Limit to Rise to £380 on 1 October

The Government has confirmed that the increase in the weekly limit which is used to calculate statutory redundancy pay will increase from £350 to £380 from 1 October 2009. It has also confirmed that this limit will not be subject to increase again in February 2010 (as would normally be the case) and will remain at £380 until February 2011.

The weekly limit is also used when calculating certain other types of payment, such as the basic award for unfair dismissal, and it is likely that the increase will also apply to these other types of payment.

The increase is intended to provide a stronger safety net for employees in the recession without placing too heavy a burden on employers. Since 1999, an annual uprating formula has been applied each February to raise the limit on a week's pay in line with the Retail Prices Index rounded to the nearest £10.