Employers plan redundancy pay above statutory minimum

Employers expect to make more redundancies in the year ahead, but half plan to offer severance awards above the statutory minimum.

The Labour Market Outlook Redundancy Special survey by the Chartered Institute of Personnel and Development and KPMG found that 50% of employers offer redundancy deals above the statutory minimum. This is currently set at a week’s pay, up to a maximum of £330, for each year of service to a maximum of 20 weeks.

The cost of redundancies varies greatly, ranging from £17,926 in the public sector to £8,981 in the private sector and £7,629 in the voluntary.
John Philpott, chief economist at the CIPD, said many employers had been hoping the economy would pick up so they could avoid making redundancies. “With the average cost of redundancy to employers now running at more than £10,000 for each person losing their job, there is a financial incentive for organisations to hold on to staff where they can,” he added.