Wednesday 24 July 2019

What is Red Tape Day 2019 and what does it mean for redundancy

Author: Cambridge Web Marketing

Should I switch mortgage?

April is the month that ushers in change. The grey of winter has finally passed, spring heralds longer daylight hours and the new financial year brings a clean slate for businesses too. But it brings something else: Spring Red Tape Day. But what is this and what does it mean?

New legislation

From April 6th each year, new legislation for businesses comes into force. This year, for example, businesses must increase their hourly rate to meet the increase in the national living wage and the hourly apprentice rate too.

What are the changes to redundancy?

Coming into force in early April, the Employment Rights (Increase of Limits) Order 2019 increased the maximum redundancy amount payable under employment legislation.

As @SpringhouseLaw points out, limits are raised each year in line with the retail price index, raising the maximum statutory redundancy payment to £15,750. On a week’s pay basis, it raises the employee’s redundancy payment from £508 a week to £525. The new rules apply to redundancies and dismissals that take place on or after 6th April 2019. If dismissal or redundancy happened before this date, the old rates will apply.

What is redundancy and what is the likelihood of it affecting you? 

It’s not uncommon to hear of firms putting out risks of redundancy notices. This occurs when they have one or more jobs they can no longer afford or that the business no longer needs.

Current Office of National Statistics data shows that 3 in every 1,000 workers were made redundant last year. Redundancy happens for all kinds of reasons, from financial constraints within the business to job changes or certain roles no longer being needed.

Every employer has rules that they must follow when making employees redundant. Some employees see redundancy coming but there are times when it happens quickly, giving people little time to prepare emotionally or financially.

What other changes is Red Tape Day 2019 ushering in?

There are other changes aside from redundancy payout changes, such as:

Pay gap report – in an effort to reduce the gender pay gap, for the second year running, companies with 250 employees or more must reveal the average difference in the hourly rates paid to male and female employees.

Employee pay slips – from 6th April, all employees, including casual and zero hour workers, must be issued with a written, printed or electronic payslip with details of how pay was calculated.

Family – related pay and statutory sick pay– there are a number of increases in the rates of various benefits, including statutory sick pay. It will increase to £94.25 for those earning at least £118 a week.

The importance of financial protection

Although not every eventuality in life can be predicted, sound financial protection can help to offset some of the financial worries of redundancy and unemployment. Talking to our expert team about your financial situation and what insurance could help will give you peace of mind. Why not get in touch?

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Written by: Cambridge Web Marketing