Redundancy pay limit another 'kick in the teeth' for UK workers
4th March 2009
Publication of Lindsay Hoyle MP’s Statutory Redundancy
(Amendment) bill
10.30am, Wednesday, March 4th
Committee Room 16, House of Commons
Millions of British workers could be missing out on thousands of
pounds desperately needed to cushion them through unemployment as
the gap between real earnings and redundancy pay stretches further,
the UK’s major unions are warning today (Wednesday).
Unions and Labour MPs are pushing for a change now to the
outdated method for calculating redundancy pay, introduced more
than 40 years ago, to pull it into line with earnings. The unions
say such a move is vital at a time when thousands of people are
losing their jobs every week.
Publishing research revealing that in nearly every UK
constituency a majority of workers depend on the outdated £350
weekly cap on redundancy pay, the unions are urging the government
to support Lindsay Hoyle MP’s private member’s Statutory Redundancy
(Amendment) bill in order that redundancy payments are updated by
summer this year.
Concern is growing among MPs and the unions that the drop in
value of redundancy pay not only denies workers much-needed money
in hard times, but is also reinforcing the UK’s reputation as a
country where it is cheap and easy to sack workers. Typical of this
is one electrician who earned £13 an hour but received only the
state basic of £9.50 per hour when sacked after sixteen years as an
electrician, meaning he was denied thousands of pounds in a time of
severe need.
While the government is yet to make clear its support for the
bill, over 130 Labour MPs have now put their names to a Commons
motion backing Lindsay Hoyle’s bill, making this issues second only
to the defence of the post office as the issue of most conern to
Labour MPs.
Publishing his bill Lindsay Hoyle MP said: “When redundancy pay
was introduced in 1965 it was a progressive measure but it has been
allowed to wither drastically in value so that it is now worth
around only half of earnings. Losing out on desperately needed cash
in these hard times is another kick in the teeth for workers.
Justice demands that we bring redundancy pay into line with
workers’ actual pay.”
Unite, Usdaw and the TUC are among those unions joining Lindsay
Hoyle to publish his bill. They will be calling on the government
to back the measure - but are warning that MPs must support the
bill through its Commons second reading to make this
happen.
Derek Simpson, joint general secretary of Unite, said: “During
this recession, thousands of people are losing their jobs every
week, often facing for the first time the frightening prospect of
redundancy and many months without income. They need all the
support possible they can get from the government and MPs to hold
their lives together, to pay bills and attempt to find new jobs and
a future.”
Tony Woodley, joint general secretary of Unite, added: “There is
not a constituency in the land where workers are not worried about
redundancy. They are desperate for help through these tough times
and stopping the 40 year rot in redundancy pay so that when workers
are laid off they receive what they're rightfully owed would be a
start. It would also begin to end the national shame of our workers
being among the cheapest to sack in Europe.”
According to John Hannett, general secretary of Usdaw, whose
members in retail have been hit hard by the recession, most notably
with the laying off of 30,000 Woolworths workers, said: “Due to the
cap on redundancy pay, many workers are losing out on thousands of
pounds that they would otherwise have received. Lifting the cap on
redundancy pay would begin the process of getting a better deal for
all workers, especially the very low paid who need every penny to
help them through the rough times.”
TUC General Secretary Brendan Barber said: “The Hoyle bill is a
fair deal for hard times. With thousands of people facing
redundancy every week, this bill would show Britain’s worried
workforce that MPs were on their side.”
The unions’ research shows in the majority of constituencies
most workers depend of the state basic for redundancy pay. Workers
in the employment groups hit hard by the recession, including
retail, health and social care and the service sector are most
likely to depend on the state basic when made redundant.
Women of all ages are hit especially hard with the majority relying
on the state rate when made redundant.
Only among corporate managers, technology professionals and
skilled metal and electrical workers is there close to a majority
of employees with access to redundancy pay above the statutory
minimum.
At present, employers have to offer a week's pay for each full
year's service to those between the ages of 22 and 41 who are being
made redundant. Older workers are offered a week and a half's pay
per year - up to a maximum of £350 a week for up to 20 years'
service.
That represents 56 per cent of average weekly earnings. But when
the scheme was introduced more than 40 years ago, the cap on
payments was worth 203 per cent of weekly earnings. The unions are
pushing for an increase in the cap to £500 a week.
ENDS
Further Information: Pauline Doyle on 07976 832861
Notes for editors: The research has been conducted by the
Labour Research Department. Copies of the statistics are
available by calling Pauline Doyle on 07976 832 861.
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