Increase in redundacy pay bad for business

13 March 2009 by
Increase in redundacy pay bad for business

Plans to increase redundancy pay to help workers laid off because of the recession would only result in company closures and more job losses, business groups have warned.

The Statutory Redundancy Payment (Amendment) Bill will reach its second reading in Parliament today (13 March), proposing to increase the maximum week's pay used to calculate statutory redundancy pay by 43%, from £350 to £500.

The private members' Bill, brought by Lindsay Hoyle MP, is supported by the country's major unions.

Hoyle said: "Today, workers are very much facing hard times again, but state redundancy pay is so out of step with average earnings it acts as a ceiling for workers, not a floor to protect them."

But the Forum of Private Business (FPB) attacked the Bill, warning that it would hinder particularly small businesses in the current climate.

Phil Orford, chief executive of the FPB said: "The proposal, apparently to protect workers, is misguided because it would increase unemployment by forcing many businesses to close that might have survived had statutory redundancy pay been left alone."

Last month, research revealed that hospitality has been one of the worst hit sectors by the recession with jobs being cut in each of the past nine months and the number of people employed in the sector falling at its fastest rate in 12 years.

Jobs go at all levels as hotel groups cut back >>

UK hoteliers must look for creative ways to cut costs >>

Hospitality jobs amongst worst hit by recession >>

Gleneagles hotel seeking ways to cut jobs and hours >>

Celtic Manor Resort to cut 10% of workforce >>

By Daniel Thomas

E-mail your comments to Daniel Thomas here.

Caterersearch.com jobs
Looking for a new job? Find your next job here with Caterersearch.com jobs

The Caterer Blog](http://www.caterersearch.com/blogs/catering-news-blog/) Catch up with more news and gossip on the Caterer Blog here
[Newsletters For the latest hospitality news, sign up for our e-mail newsletters.
The Caterer Breakfast Briefing Email

Start the working day with The Caterer’s free breakfast briefing email

Sign Up and manage your preferences below

Check mark icon
Thank you

You have successfully signed up for the Caterer Breakfast Briefing Email and will hear from us soon!

Jacobs Media is honoured to be the recipient of the 2020 Queen's Award for Enterprise.

The highest official awards for UK businesses since being established by royal warrant in 1965. Read more.

close

Ad Blocker detected

We have noticed you are using an adblocker and – although we support freedom of choice – we would like to ask you to enable ads on our site. They are an important revenue source which supports free access of our website's content, especially during the COVID-19 crisis.

trade tracker pixel tracking