On February 1st 2012, changes will come into place in the statutory amounts payable to employees on redundancy and to guarantee payments that must be made in certain circumstances. A third element of change is to the maximum unfair dismissal award an employer can be made liable for. All of these amounts have slight increases applied after the end of January.
Redundancy Payments
To qualify for statutory redundancy payments, a staff member must have been in your employment continuously for at least two years. The amounts that must be paid to qualifying personnel are based on their weekly pay, and the number of years employed in specified age bands.
For each full year with you when they were under 22, they should get half a week’s pay. Between the ages of 22 and 40, they should get one week’s pay per year employed, and at over 41, it becomes one and a half week’s pay per year. There is, however, a maximum amount of weekly pay set. Currently this is £400, but on February 1st, it becomes £430.
Guarantee Payments
If you are unable to provide work for someone contracted to be in your employment, you are obliged to make them a guarantee payment for each day they do not work, up to a maximum of five days in any three month period, or pro rata for part time staff. There are a few exceptions to this rule, one being that the person has been in your employ for less than a month. Another is if the problem is due to industrial action.
The rate payable for compliance is currently £22.20 per day or the worker’s daily rate if less than this. Therefore, if a worker normally works a five day week and is laid off for a week or more, he or she would have to be paid £111.00. On Feb 1st, this maximum rises to £23.50, making the compliance amount £117.50 for a full time worker in each three month period.
Unfair Dismissal Awards
When you have a difficult employee, it is important to be aware of what might constitute unfair dismissal, and to follow the proper complaint and dismissal procedures. If a former employee claims unfair dismissal and the case is upheld, you are likely to have to pay them compensation. This can become more expensive after January 31st. At the moment if a case goes against an employer, the most compensation that can be awarded is £68,400. On February 1st 2012, this rises to £72,300.
It pays to keep on top of your obligations as an employer, and to be up to date with the many changes that take place throughout the year.
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