A Bill to provide for a mechanism for statutory redundancy pay which links it to average weekly earnings; and for connected purposes
The right of an employee to receive a one-off redundancy payment from their employer is well established, appearing in many individual contracts of employment. The Employment Rights Act 1996 entitles employees to a redundancy payment after they have been employed continuously with the same employer for two years. The payment is calculated with reference to how long the employment has lasted, the relevant age bracket into which the employee falls, and their weekly pay. The legislation places a ‘cap’ on the amount of a week’s pay to be used in the calculation. This cap is reviewed annually and if necessary uprated in line with the retail prices index. The Bill would oblige the Secretary of State to introduce regulations within a specific time frame that would establish a link between the annual uprating of the cap and average earnings.
The bill would change how the statutory redundancy pay cap is uprated. It requires the government to set regulations that tie the cap used in calculating redundancy pay to average earnings, instead of inflating it by the Retail Prices Index, which could affect how much redundancy pay employees receive.
The bill is currently at the money resolution stage in the Commons. If approved, it would move on to the normal bill stages and later be considered by the House of Lords.
Generated 21 February 2026
The Bill was debated at Second Reading on 13 March. The House of Commons voted for it to be sent to a Public Bill Committee that will scrutinise the Bill clause by clause.
The Bill was withdrawn by its sponsor and will make no further progress.
No recorded votes for this bill yet.
