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Statutory Redundancy Pay and Minimum Wage Increase

Jennifer Smith (Solicitor)

The 1st October 2009 saw the maximum limit of a week’s pay for statutory redundancy purposes increase from £350 to £380. This weekly limit will also apply when calculating other types of payment, including the basic award for unfair dismissal claims.

The Government’s decision to increase this limit has been made with a view to provide more support for individuals made redundant in the current economic climate whilst, at the same time, not placing employers under an unduly onerous burden. The Government has stated that the limit will not rise again until February 2011.
The Government has also announced increases to the National Minimum Wage with effect from 1 October 2009. New limits are as follows:

• Adult workers (aged 22 and over): increase from £5.73 to £5.80 per hour

• Development rate (for workers aged 18 to 21): increase from £4.77 to £4.83 per hour

• Young person’s rate (for workers aged 16 and 17): increase from £3.53 to £3.57 per hour.