MPs ignore buried redundancy clause

Employers’ fears over a “buried” redundancy clause in the Work and Families Bill have once again been ignored in the House of Commons.

Last week, Personnel Today revealed employer concerns that Clause 14 of the Bill – which would give the government carte blanche to impose an unlimited increase in statutory redundancy pay (SRP) – had yet to receive any scrutiny.

The Bill has now had its third reading in the House of Commons, and despite assurance from the Conservatives that its teams would be “looking into it”, the redundancy issue was again sidelined by arguments over maternity and paternity pay.

David Yeandle, deputy director of employment policy at manufacturers’ organisation the EEF, said it was extremely disappointing that employers’ genuine concerns had so far been ignored. “We will now pursue this when it goes to the House of Lords,” he said.

Clause 14 of the Bill gives the secretary of state the power ‘on one occasion only’ to increase the weekly limit that applies in relation to SRP. This increase does not need to be related to changes in the retail price index.

The clause is the result of promises made by Labour to trade unions under the Warwick Agreement, in which the government promised to ‘up-rate redundancy pay’. Unions have pressed for the current 280 a week to be doubled, leaving employers worried that redundancy costs could rocket.

A Conservative spokesman said the party had not raised the issue because there was “so much else going on”, but added it would be seeking clarification from work and pensions secretary Alan Johnson and would “pick a fight if necessary”.

Other important aspects of the debate

  • Concerns were voiced by MPs that the government was breaking its promise to cut down on regulation when it was revealed that no other legislation was be struck out to make way for the Bill, as is now common practice.
  • A motion to have a ‘sunset clause’ inserted into the Bill, forcing the government to review paternity leave provisions after a year was withdrawn.
  • Under new provisions set out in the Bill, section 106 of the Employment Rights Act 1996 will be extended to include the dismissal of employees taken on to cover absence due to additional paternity leave – even if that leave goes beyond 12 months.

Comments are closed.