April 4, 2023
By Fflur Jones
From 6th April 2023, the cap on a week’s pay when calculating an employee’s statutory redundancy pay will jump from £571 to £643. This hike, driven by inflation, will also mean that, for those employees with long service, the maximum statutory redundancy payment will rise from £17,130 to £19,290.
For employers currently going through redundancy consultation periods with their staff (or for those anticipating making redundancies in the near future), these increases could, in some cases, add close to 13% to the cost of making redundancies. Given that one of the most common reasons for making redundancies is as part of a cost-cutting exercise, such increases will certainly give employers something to think about.
Our tips for approaching these increases are as follows:
– Planning redundancies just got more important. At the very start of a process, map out where you want to get to at the end and work back from there.
– Don’t delay. If you need to make redundancies, delaying will only add to the cost (because redundancy payments also increase the longer an employee has been employed).
– Calculate your likely maximum liability for redundancy payments – ideally in spreadsheet form.
– Don’t forget that, when making redundancies, employees are also entitled to their notice and accrued holiday. Making employees work their notice periods and making them take their accrued holiday during their notice periods can help reduce the financial cost at the end for an employer.
– Ask for advice. Getting things right is important. From 6th April, for the first time, an Employment Tribunal can now award over £100,000 as compensation in unfair dismissal claims. As such, following a good process and dismissing fairly for redundancy has never been as important.
Increases in the National Minimum Wage and the National Living Wage
From April 2023, new hourly rates for National Minimum Wage and National Living Wage will take effect. The new rates will be:
• Apprentices – an increase to £5.28 from £4.81;
• Ages 16-17 – an increase to £5.28 from £4.81;
• Ages 18-20 – an increase to £7.49 from £6.83;
• Ages 21-22 – an increase to £10.18 from £9.18;
• National Living Wage (ages 23+) – an increase to £10.42 from £9.50.
Statutory Sick Pay (SSP), Statutory Maternity Pay (SMP) and other statutory payments
Statutory payments for time off work will also increase in April 2023. This will mean:
• Weekly payment for maternity, paternity, shared parental, adoption and parental bereavement pay will increase to £172.48 from £156.66;
• Weekly payment for statutory sick pay will increase to £109.40 from £99.35.
I have worked with Darwin Gray for a number of years and the level of service, professionalism and timely response is second to none. I would highly recommend Darwin Gray to any business.”
Darwin Gray have provided us with a first-class service for many years now. They really take the time to understand our business and develop relationships which results in advice and support that is contextualised and effective.”
We have worked with Darwin Gray for several years and have always found their services and advice to be first class.”
An extremely professional and sincere company who make time for your queries and understand the need to break down certain facts and information to ensure everything is understood perfectly. I would highly recommend the company to anyone looking for any type of legal advice”
PSS has worked with Darwin Gray for many years. We have always received an excellent service. Prompt and professional advice and support.”
We have used several departments within DG recently and we have been very pleased with an effective, efficient and down to earth service. Very happy thus far and I expect that we will continue to use DG.”
Darwin Gray offer us truly superb services. Very professional, quick and services available bilingually which is very important to us, highly recommend.”
My “go to” in urgent and time sensitive cases for direction, support and advice. The team are quick to respond to calls or emails for advice and support on all matters. Always explain complex matters in a way a lay person can easily understand.”