Unite: Redundancy pay limit another `kick in the teeth’ for UK workers
Millions of British workers could be missing out on thousands of pounds desperately needed to cushion them through unemployment as the gap between real earnings and redundancy pay stretches further, the UK’s major unions are warning today (Wednesday).
Unions and Labour MPs are pushing for a change now to the outdated method for calculating redundancy pay, introduced more than 40 years ago, to pull it into line with earnings. The unions say such a move is vital at a time when thousands of people are losing their jobs every week.
Publishing research revealing that in nearly every UK constituency a majority of workers depend on the outdated £350 weekly cap on redundancy pay, the unions are urging the government to support Lindsay Hoyle MP’s private member’s Statutory Redundancy (Amendment) Bill in order that redundancy payments are updated by summer this year.
Concern is growing among MPs and the unions that the drop in value of redundancy pay not only denies workers much-needed money in hard times, but is also reinforcing the UK’s reputation as a country where it is cheap and easy to sack workers. Typical of this is one electrician who earned £13 an hour but received only the state basic of £9.50 per hour when sacked after sixteen years as an electrician, meaning he was denied thousands of pounds in a time of severe need.
While the government is yet to make clear its support for the Bill, over 130 Labour MPs have now put their names to a Commons motion backing Lindsay Hoyle’s bill, following only the defence of the post office as the issue most concerning Labour MPs.
Publishing his Bill, Lindsay Hoyle MP said: “When redundancy pay was introduced in 1965 it was a progressive measure but it has been allowed to wither drastically in value so that it is now worth around only half of earnings. Losing out on desperately needed cash in these hard times is another kick in the teeth for workers. Justice demands that we bring redundancy pay into line with workers’ actual pay.”
Unite, Usdaw and the TUC are among those unions joining Lindsay Hoyle to publish his Bill. They will be calling on the government to back the measure – but are warning that MPs must support the Bill through its Commons second reading to make this happen.
Derek Simpson, joint general secretary of Unite, said: “During this recession, thousands of people are losing their jobs every week, often facing for the first time the frightening prospect of redundancy and many months without income. They need all the support possible they can get from the government and MPs to hold their lives together, to pay bills and attempt to find new jobs and a future.”
Tony Woodley, joint general secretary of Unite added: “There is not a constituency in the land where workers are not worried about redundancy. They are desperate for help through these tough times and stopping the forty year rot in redundancy pay so that when workers are laid off they receive what they’re rightfully owed would be a start. It would also begin to end the national shame of our workers being among the cheapest to sack in Europe.”
According to John Hannett, general secretary of Usdaw, whose members in retail have been hit hard by the recession, most notably with the laying off of 30,000 Woolworths workers, said: “Due to the cap on redundancy pay, many workers are losing out on thousands of pounds that they would otherwise have received. Lifting the cap on redundancy pay would begin the process of getting a better deal for all workers, especially the very low paid who need every penny to help them through the rough times.”
TUC General Secretary Brendan Barber said: “The Hoyle Bill is a fair deal for hard times. With thousands of people facing redundancy every week, this Bill would show Britain’s worried workforce that MPs were on their side.”
The unions’ research shows in the majority of constituencies most workers depend of the state basic for redundancy pay. Workers in the employment groups hit hard by the recession, including retail, health and social care and the service sector are most likely to depend on the state basic when made redundant. Women of all ages are hit especially hard with the majority relying on the state rate when made redundant.
Only among corporate managers, technology professionals and skilled metal and electrical workers is there close to a majority of employees with access to redundancy pay above the statutory minimum.
At present, employers have to offer a week’s pay for each full year’s service to those between the ages of 22 and 41 who are being made redundant. Older workers are offered a week and a half’s pay per year – up to a maximum of £350 a week for up to 20 years’ service.
That represents 56 per cent of average weekly earnings. But when the scheme was introduced more than forty years ago, the cap on payments was worth 203 per cent of weekly earnings. The unions are pushing for an increase in the cap to £500 a week.
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Further Information: Pauline Doyle on 07976 832861
Notes for editors: The research has been conducted by the Labour Research Department. Copies of the statistics are available by calling Pauline Doyle on 07976 832 861.
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