Employment: Changes to rates from 1 October 2009

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Increases to statutory redundancy payment and basic award for unfair dismissal

The limit on the maximum amount of a week’s pay taken into account to calculate the amount of statutory redundancy payments and basic awards for unfair dismissal increased with effect from 1 October 2009 from £350 to £380. The maximum awards for both are now £11,400.

As previously reported no further increase will now take effect until 2011.

Broadly, the increases affect dismissals where the ”appropriate date” falls after 1 October  2009 but care should be taken as the rate increase does apply to some other situations.  The “appropriate date” is the “effective date of termination” as calculated under statutory rules in the Employment Rights Act 2006.

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