Call for redundancy pay reforms

Unions and MPs are calling for a change in redundancy pay rules to cushion the blow of construction workers losing their jobs.

Labour MP Lindsey Hoyle has launched a Private Member's Bill in a bid to remove the £350 weekly cap on redundancy cash.

A spokesman for the Unite union said: "Concern is growing 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."

More than 130 Labour MPs have now put their names to a Commons motion backing Lindsay Hoyle’s bill, making this issues second only to the defence of the post office as the issue of most conern to Labour MPs.

Hoyle 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.”

Currently, 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 40 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.