Provide for a mechanism for statutory redundancy pay which links it to
average weekly earnings; and for connected purposes.
Be it enacted by the Queen’s most Excellent Majesty, by and with the advice and
consent of the Lords Spiritual and Temporal, and Commons, in this present
Parliament assembled, and by the authority of the same, as follows:—
Linking of statutory redundancy pay to average weekly earnings
This section applies to redundancy payments, as specified in section 227(1)(c)
of the Employment Rights Act 1996 (c. 18) (maximum amount).
The Secretary of State must, within twelve months of the day on which this Act
comes into force, make regulations providing for—
a method of calculation of statutory redundancy pay that links it, in
such a manner as the Secretary of State considers appropriate, to
the regulations to take effect from a date within twelve months of the
date on which the regulations are made; and
the link to take account, in subsequent years, of an annual comparison
of statutory redundancy pay with average weekly earnings.
Before making regulations under subsection (2) the Secretary of State must—
have regard to the desirability of including in the mechanism an annual
comparison between the annual rate of change in—
average weekly earnings, and
the retail prices index;
consult the Confederation of British Industry and the Trades Union
Regulations under this section shall be made by statutory instrument.
Regulations under this section are subject to annulment in pursuance of a
resolution of either House of Parliament.
“average weekly earnings” means the latest figure for average weekly
earnings published by the Office for National Statistics;
“retail prices index” has the meaning given by section 34(5) of the
Employment Relations Act 1999 (c. 26).
Short title, commencement and extent
This Act may be cited as the Statutory Redundancy Pay (Amendment) Act
This Act comes in to force at the end of the period of one month beginning with
the day on which it is passed.
This Act extends to England and Wales and Scotland.