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Employment Protection (Variation Of Limits) Order 1981

Volume 15: debated on Wednesday 16 December 1981

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asked the Secretary of State for Employment what have been the percentage increases in the limits listed in the draft statutory instrument, the Employment Protection (Variation of Limits) Order 1981, for each year since their introduction; and how this compares in each of those years with the increase year-on-year, at the time of the laying of the order, in retail prices, average earnings, and, where relevant, the tax and price index.

Under the Redundancy Payments Act 1965, the maximun amount of a week's pay that could be used for calculating redundancy payments was £40, increased to £80 in 1974.Under the Employment Protection Act 1975 an £80 limit on a week's pay was adopted for amounts payable under the insolvency provisions—from April 1976—and for the basic and additional awards of compensation for unfair dismissal—from June 1976. The guarantee pay provisions of the Act were brought into operation in February 1977 at the rate of £6 per day.These limits remained unchanged until the first annual review under the Act took place in autumn 1977 which varied the limits with effect from February 1978. Each year since then, orders have been laid in November or December after the annual review varying the limits with effect from the following February.The following table shows the year-on-year percentage increases in the limits—February to February from 1977—compared with the increases in retail prices, average earnings and the tax and prices index for the year to the September preceding the laying date.

Percentage increases Year on year
Limit on a week's payGuarantee pay
February to FebruaryPer cent.Per cent.
1977–19782510
1978–1979109·8
1979–809·110·3
1980–19818·39·4
1981–1982 (proposed)3·84·6
Percentage increases Year on year
Retail pricesAverage earningsTax and prices
September to SeptemberPer cent.Per cent.Per cent.
1976–197715·67·714·2
1977–19787·815·11·9
1978–197916·514·514·1
1979–1898015·926·017·3
1980–198111·49·314·9

asked the Secretary of State for Employment what adjustment would be needed to each of the limits listed in the draft statutory instrument, the Employment Protection (Variation of Limits) Order 1981, to restore them to their values at the time of introduction.

The weekly earnings limit for redundancy payments was fixed at £40 in 1965. An increase to approximately £200 would be necessary to keep in line with increases in the retail price index to September 1981. The earnings limit for the insolvency provisions and for basic awards under the unfair dismissal provisions of the Employment Protection (Consolidation) Act 1978 have, since their introduction, been the same as that applied to redundancy payments.

The limit for guarantee pay was fixed initially at £6 per day in February 1977. Based on the RPI increase to September 1981 a current figure of approximately £10 would have the same value.