As at 1 October 2009 ‘a weeks pay’ for unfair dismissal compensation and statutory redundancy pay has been increased. This was announced by Alistair Darling in this year’s budget, as an attempt to help the increasing number of people being made redundant due to the recession.


The Work and Families (Increase of Maximum Amount) Order 2009 implements the one-off 2009 Budget increase. The maximum amount of a ‘week's pay’ for calculating compensation for unfair dismissal and redundancy pay will increase from £350 to £380.


As this change is taking place in October, on 1 February 2010 there will be no change to the limit on a week's pay, as would usually be the case.

Employers are advised to amend any Ready Reckoners, or redundancy calculators/ spreadsheets, as of 1 October 2009 onwards.

For redundancy consultations taking place at present, you must consider that if the employee’s date of termination is after 1 October 2009, the new rate must apply.

For further advice, please contact us on: 0845 1300 616.