Employers have paid out on average £9,362 per worker in redundancy pay over the last 12 months, and paid out a record 13.4 billion in redundancy payments over the past three years, says a recently obtained report from the HM Revenue and customs.
The figures show that both the public sector and private sector companies have felt the impact of cutting costs and having to make valuable employee redundant in order to stay afloat in these touch economic conditions.
David Israel, head of employment at Wedlake Bell, said:
‘The sheer scale of these redundancy payments is staggering. The overall financial and human cost of having to make these redundancies has been massive’.
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‘While the worst of the private sector cost-cutting appears to be over, the public sector has now started to restructure staff levels.
‘On average, businesses have been paying far more than the minimum redundancy payments they are required to pay by law, no doubt in part to avoid any long and drawn out court proceedings.’
There were 470,000 redundancies in the year to March, down from 480,000 in the previous 12 months according tot he obtained research report.
Since February, it has been more expensive for employers to make workers redundant. The maximum award for unfair dismissal has risen from 65,300 to 68,400 and the maximum statutory redundancy pay has increased from 11,400 to 12,000.
Each public sector redundancy cost the public purse an average of 12,000 as year in tax losses, benefits payments ad increased health and social welfare spending according to research by accountant grant Thornton
