Statutory Redundancy Pay Bill could destroy jobs, says IoD

Dated: 13 March 2009

The Institute of Directors is opposed to the Statutory Redundancy Pay Bill. Firms of all sizes are desperate to keep staff and are only choosing to make redundancies because they are struggling to stay afloat.

The proposal would significantly increase Statutory Redundancy payouts and would drive up the cost of making employees redundant, which would make it harder for firms to reduce their cost base during the downturn. This in turn will jeopardise jobs that could otherwise be saved. Proponents of the Bill are therefore mistaken if they think their plans would help workers.

The IoD has been calling for months for the Government to avoid legislative plans that would impact negatively on firms, so it would be very disappointed if Ministers now gave their support to a regulatory proposal which would negatively impact on the finances of many firms.

Commenting Alistair Tebbit, Head of Employment Policy at the IoD said:

“The IoD would be aghast if the Government supported a Bill that pushes up redundancy costs for firms that are already struggling to stay in business. Losing staff is the last resort for most firms, but when it becomes necessary they need to be able to do so without the sort of punitive measures proposed in the Bill. The proposal as drafted would actually jeopardise jobs by making it harder for firms to reduce the cost base and offer little benefit to the vast majority of employees.”


Contact Points

Edwin Morgan
Media Relations Manager
Institute of Directors, 116 Pall Mall, London SW1Y 5ED
Tel: +44 (0)20 7451 3392
Mob: +44 (0)7814 386 243

Notes to editors

  • The Institute of Directors (IoD) was founded in 1903 and obtained a Royal Charter in 1906. The IoD is a non-party political organisation with approximately 38,000 members in the United Kingdom and overseas. Membership includes directors from right across the business spectrum – from media to manufacturing, e-business to the public and voluntary sectors. Members include CEOs of large corporations as well as entrepreneurial directors of start-up companies.
  • The IoD provides an effective voice to represent the interests of its members to key opinion-formers at the highest levels. These include Government ministers and their shadows, parliamentary committee members, senior civil servants and think-tanks. IoD policies and views are actively promoted to the national, regional and trade media. Follow us on Twitter to get the IoD’s reaction on business and public policy issues.
  • The IoD offers a wide range of business services which include business centre facilities, with ten UK centres (three in London, one each in Reading, Birmingham, Cardiff, Manchester, Nottingham, Norwich, Edinburgh, Glasgow and Belfast) and one in Paris, conferences, networking events, virtual offices, issues-led guides and literature, as well as free access to business information and advisory services. The IoD places great emphasis on director development and has established a certified qualification for directors – Chartered Director – as well as running specific board and director-level training and individual career mentoring programmes.
  • For further information, visit our website: