The Government has published a final impact statement in relation to the budget proposal to increase redundancy pay. The Statement confirms that the one-off increase from £350 to £380 in the maximum week's pay that can be taken into account for the purposes of calculating statutory redundancy pay will take effect from 1 October 2009.

The increase will also apply to other compensation payments that are calculated by reference to a week's pay, including the basic award in unfair dismissal claims, compensation for failure to comply with flexible working procedures, compensation for failure to allow an employee to be accompanied to disciplinary or grievance hearings or to give a statement of employment particulars under the Employment Rights Act and the various payments made to employees by the Redundancy Payments Office in the event of their employer's insolvency.

Employers will be pleased to note that the usual annual increase will be suspended in 2010, so that the next increase in a week's pay will not take place until February 2011.