Since February 1st, employers will find it more costly to make workers redundant as the maximum caps on statutory redundancy pay and unfair dismissal compensation have increased.
Employers have been spared annual increases in redundancy costs in order to soften the blow of a painful recession in recent years. But as the country regains economic stability, the price of redundancies will rise, meaning employers must take much greater care when considering terminating staff contracts.
The maximum payouts for unfair dismissal cases increase from £65,300 to £68,400, in order to reflect the rise in the Retail Price Index over the past 12 months.
Maximum statutory redundancy pay also increases from £11,400 to £12,000, the first such increase since 1st October 2009, based on a rise on the maximum weekly wage figure used to calculate the amount given to employees who are made redundant.
Employers should seek legal help at the earliest opportunity to ensure they are complying with new legal requirements for dismissing employees and redundancy procedures.