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.”