date: 8 April 2009
embargo: 00.01hrs Thursday 9 April 2009
More than 20 million employees across UK could benefit from reduced qualifying period for statutory redundancy pay
The TUC called on the Government today (Thursday) to reduce the qualifying period for statutory redundancy pay (SRP) entitlement from two years to 12 months. TUC research reveals that more than 20 million employees across the UK could benefit from this step.
Currently, employees aged 16 or over are entitled to SRP after a two year qualifying period working for the same employer, so the youngest age at which an employee can benefit from redundancy pay is 18.
TUC analysis of official statistics reveals that if this qualifying period was halved to one year then 20,543,000 employees would gain extra redundancy entitlement. Of these more than three million employees would be entitled to SRP for the first time - nearly one in eight (12.2 per cent) of the workforce. More than 17 million employees would increase their existing entitlement to SRP.
While older workers are most likely to be in the same job for more than one year, many younger employees would stand to gain SRP for the first time under the TUC's proposals. Nearly one in three (30.3 per cent) employees aged 17-19 and one in five (20.9 per cent) 20-24 year olds would gain.
Employees in every region across the UK would benefit from the reduced qualifying time for SRP. The nations and regions with the highest percentage of employees gaining are Northern Ireland (87.2 per cent), Wales (84.2 per cent) and the East of England (83.3 per cent).
TUC General Secretary Brendan Barber said: 'We are seeing a return of mass unemployment to the UK. And the situation will get worse before it gets better, as unemployment always persists even after a recovery starts.
'Many employees will be facing redundancy and unemployment for the first time in their lives.
'There can be no assumption that the people who are losing their jobs will find it easy to get new ones, and they will need all the help they can get with redundancy pay, retraining and personal advice.
'Many decent employers, especially those that recognise unions, already offer their staff more generous redundancy packages than the statutory entitlement. The qualifying period for statutory redundancy pay should be cut to 12 months to help more employees across the UK cope with the financial costs of losing their jobs.'
The TUC is also calling on the Government to increase the amount of an employee's weekly earnings which counts to SRP from £350 to at least £500, and to ensure that future rises are in line with average earnings.
The current £350 limit is far lower in real terms than the original value of statutory redundancy pay when it was introduced in 1965, so to ensure that employees are properly compensated when they lose their jobs, the TUC believes the Chancellor should increase the weekly limit on statutory redundancy pay to at least £500.
Official statistics also show that 46.2 per cent of UK employees earn more than £350 a week, so nearly half of the workforce is losing out with a statutory limit of £350 for redundancy pay.
NOTES TO EDITORS:
- 46.2 per cent of UK employees earn more than £350 a week (Source ONS Annual Survey of Hours and Earnings 2008).
- Nearly seven out of eight employees (83.1 per cent) would benefit if the TUC's proposal for reducing the minimum qualifying period for SRP is accepted. Nearly one in eight employees (12.2 per cent) would gain some redundancy protection for the first time and seven out of ten employees (70.9 per cent) would increase their existing entitlement.
- Time in current job
|
Time in job |
Number of employees |
Per cent of employees |
|
Less than one year |
4,175,706 |
16.9 |
|
More than one year but less than two years |
3,022,809 |
12.2 |
|
More than two years |
17,519,981 |
70.9 |
|
Total |
24,718,496 |
100.0 |
Source: Labour Force Survey (LFS) Microdata Service autumn 2008. Note: employees aged 17 to 64 only.
- Time in current job by regions
|
Region |
All gaining extra protection from the TUC's proposals |
Gaining protection for the first time from the TUC's proposals |
||
|
Employed more than one year |
Per cent of employees in the same job for more than one year |
Employed more than one year but less than two |
Per cent of employees in same job for more than one year, less than two |
|
|
North East |
838,251 |
81.1 |
106,919 |
10.5 |
|
North West |
2,293,108 |
82.7 |
313,417 |
11.6 |
|
Yorks and Humberside |
1,770,676 |
82.9 |
253,853 |
12.1 |
|
East Midlands |
1,592,330 |
82.6 |
233,422 |
12.4 |
|
West Midlands |
1,795,166 |
82.6 |
267,265 |
12.6 |
|
Eastern |
2,021,535 |
83.3 |
290,155 |
12.3 |
|
London |
2,549,998 |
81.1 |
435,779 |
14.1 |
|
South East |
2,983,073 |
82.2 |
418,560 |
11.9 |
|
South West |
1,774,510 |
82.6 |
259,989 |
12.5 |
|
Wales |
963,821 |
84.2 |
118,023 |
10.5 |
|
Scotland |
1,852,900 |
82.9 |
250,474 |
11.4 |
|
Northern Ireland |
565,006 |
87.2 |
74,953 |
11.8 |
|
Total |
20,542,970 |
83.1 |
3,022,809 |
12.2 |
- Employees in job for between one and two years by age
|
Age |
All gaining extra protection from the TUC's proposals |
Gaining protection for the first time from the TUC's proposals |
||
|
Employed more than one year |
Per cent of employees in the same job for more than one year |
Employed more than one year but less than two |
Per cent of employees in same job for more than one year and less than two |
|
|
17-19 |
541,742 |
49.4 |
333,088 |
30.3 |
|
20-24 |
1,662,602 |
63.2 |
550,920 |
20.9 |
|
25-29 |
2,281,671 |
77.4 |
540,274 |
18.3 |
|
30-34 |
2,265,257 |
83.2 |
360,478 |
13.3 |
|
35-39 |
2,610,794 |
85.5 |
328,867 |
10.8 |
|
40-44 |
2,885,959 |
88.0 |
298,423 |
9.1 |
|
45-49 |
2,807,177 |
90.5 |
243,260 |
7.8 |
|
50-54 |
2,333,170 |
91.0 |
165,028 |
6.4 |
|
55-59 |
1,958,532 |
92.7 |
131,899 |
6.2 |
|
60-64 |
1,195,886 |
93.1 |
70,572 |
5.5 |
|
Total |
20,542,970 |
83.1 |
3,022,809 |
12.2 |
- The TUC recently launched a package of support for workers who have been made redundant, or are at risk of redundancy or of losing their homes due to the economic downturn. The package includes two new free booklets - Coping with the Economic Downturn and Facing Redundancy - as well as updated information about redundancies, how to use JobCentre Plus, how to look for a new job, and what training and benefits individuals are entitled to on www.worksmart.org.uk the TUC's website for people at work. The website has downloads of both leaflets, and contains questions and answers on all aspects of redundancy.
- All TUC press releases can be found at www.tuc.org.uk
- Register for the TUC's press extranet: a service exclusive to journalists wanting to access pre-embargo releases and reports from the TUC. Visit www.tuc.org.uk/pressextranet
Contacts:
Media enquiries:
Elly Brenchley T: 020 7467 1337 M: 07900 910624 E: ebrenchley@tuc.org.uk
Rob Holdsworth T: 020 7467 1372 M: 07717 531150 E: rholdsworth@tuc.org.uk
Press release (1,200 words) issued 9 Apr 2009
