Unions back fair deal on redundancy

04.03.09

Labour’s affiliated unions today backed MP Lindsay Hoyle’s bill to make redundancy pay fairer.

As the bill was launched in the House of Commons this morning, unions warned that aillions 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.

Unions and Labour MPs are pushing for a change now to the outdated method for calculating redundancy pay, introduced more than 40 years ago, to pull it into line with earnings.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Publishing research revealing that in nearly every UK constituency a majority of workers depend on the outdated £350 weekly cap on redundancy pay, the unions are urging the government to support Lindsay Hoyle MP’s private member’s Statutory Redundancy (Amendment) bill in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.

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.”

Tony Woodley, joint general secretary of Unite, and Chair of TULO, 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 40 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.”

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.”

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, “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.

Unions are 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.