Statutory redundancy pay is unfairly calculated

[coffeeforone]

And example I came across recently. 2 colleagues are being made redundant, both have worked for company for 7 years.

One works part time 3.5 days per week (39k FTE) pro rated to £27k. The other is more senior, works full time, lots of unpaid overtime and earns £65k. Both will receive the exact same statutory redundancy pay - circa £3500. AIBU to think this is slightly unfair?

Statutory includes additional weighting for service after a certain age so if the pt employee is older that may be why.

The calls are based on number of redundancy weeks, from the aces ready reckoned, based on their age and length of service. I'm guessing as you have said they have both worked there 7 years, one must be much older than the other?

Sorry, spelling is awful. That should have read calcs and acas

They are both late 30's, senior one just slightly older

It's because the weekly amount is capped. It's shit for people who earn more.

It's capped isn't it? So however much you earn, you can only get up to the maximum, so two people on different salaries could get the same amount.

Sounds like they've both hit the cap of £508/week. Earnings above this don't count towards statutory redundancy

Statutory redundancy pay is capped at £508 per week so by my reckoning with 7 years service assuming both are between the age of 22 and 40 it will be a payment of £3,556

It's because the weekly pay used for the calculation is capped at £508. That's about £26,500 per annum. They both will have their rate calculated on the capped weekly rate, but the bigger earner loses out more.

If you were made redundant on or after 6 April 2018, your weekly pay is capped at £508 and the maximum statutory redundancy pay you can get is £15,240. If you were made redundant before 6 April 2018, these amounts will be lower. from here Gov website

You can use this calculator to check whether the company has got the sums right.

Yup, it's the statutory cap at play. Some companies have schemes that pay on actual earnings or use a more generous multiplier.

Thanks all, I've checked the links and the amount is correct. It just seems a bit rubbish and unfair on the more senior one, who is more qualified, works harder and is sole breadwinner, unlike the part timer.