If an employer makes an employee who has two or more years service, redundant, then they must make a statutory redundancy payment based on the amount they earn per week, length of service and age.
Weekly pay has now been set at a maximum of £489, which is an increase of £10 per week (previously £479 per week). With this in mind, it now means that the maximum award for statutory redundancy will also increase, under the new legislation, from £14,370 to £14,670.
This may be particularly pertinent for employers who are making large scale redundancies.
Changes to unfair dismissal compensatory awards have also come into effect, increasing from £78,962 to £80,541. This will be effective on any dismissals on or after 6th April 2017.
Employers must follow a fair redundancy process when making employees redundant. There must be a genuine redundancy situation and the employer must ensure that there are no other available options to them, for example trying to redeploy them in another area of the business.
If the redundancy situation is not genuine, then the employee may be able to sue the employer for unfair dismissal.