The cost of redundancy payments in the UK fell 28 per cent last year
The cost of redundancy payments to UK businesses fell 28 per cent last year, according to analysis published today.
Redundancy payments fell to a decade low of £3.3bn in 2018-19, down from £4.6bn the previous year, law firm EMW said.
The firm said the sharp fall in the amount paid by UK businesses in redundancy payments suggests the negative impact of Brexit on the economy may not have been as bad as initially feared.
The number of redundancy payments has also dropped to a 10-year low, falling to 180,000 last year, down from 380,000 in 2008-9 during the credit crunch.
EMW said another factor that may have reduced the number of redundancies is the UK’s tight labour market. It said some businesses may have chosen to retain staff they might not need in the short term due to the difficulties in recruiting replacements later.
However, the data may not reveal the full number of workers losing their jobs, as it does not show workers made redundant by their employers after less than two years’ employment as they are not eligible for redundancy pay.
It also does not include agency workers laid off or those in the gig economy who in some cases are treated as self-employed.
Many of the jobs lost in the retail sector in the last year may not have led to redundancy payments as retail businesses tend to have a high turnover of staff with many part-time employees, the firm said.
Jon Taylor, principal at EMW, says: “Brexit has not led to a large wave of redundancies, which will be welcomed by both businesses and workers but we are still in the transitional period and the position may be different this time next year.
“Of course, these figures don’t necessarily give a 100 per cent complete picture – many people laid off in the last year won’t have received redundancy pay for a variety of reasons. The fall in the total amount of redundancy pay might disguise much higher levels of people being laid off.
“In addition, gig economy and agency workers who have their contracts terminated are not captured by these figures. As the gig economy and the agency sector grows, this will group is becoming more significant.”