Overview

This bill aims to update the calculation of statutory redundancy pay in the UK, linking it to average weekly earnings. This will ensure that redundancy payments keep pace with changes in wages over time.

Description

The Statutory Redundancy Pay (Amendment) Bill modifies the Employment Rights Act 1996. It mandates the Secretary of State to create regulations within 12 months, establishing a new method for calculating statutory redundancy pay. This calculation will be tied to average weekly earnings data from the Office for National Statistics. The regulations will come into effect within a further 12 months of their creation. The bill also requires an annual review of the link between redundancy pay and average weekly earnings, considering inflation (as measured by the Retail Prices Index). Before creating these regulations, the Secretary of State must consult with the Confederation of British Industry (CBI) and the Trades Union Congress (TUC).

Government Spending

The bill itself doesn't directly specify government spending. However, linking redundancy pay to average weekly earnings could lead to increased government expenditure if average weekly earnings rise significantly. The exact financial impact will depend on future changes in average weekly earnings and the specific calculation method used.

Groups Affected

This bill primarily affects:

• Employees: Those made redundant will receive statutory redundancy pay calculated under the new formula, potentially affecting the amount they receive.
• Employers: Will face potentially increased costs related to redundancy payments, depending on future average weekly earnings.
• The Government: Will be responsible for setting up and maintaining the new calculation system and bear any increases in costs associated with higher redundancy payments.

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