October 2009 Changes Briefing / Briefing Papers Date: Feb 24, 2010 - 11:50 AM Minimum Wage The Government has confirmed increases to the National Minimum Wage (NMW) from 1st October 2009 and also amended the main regulations to ensure that tips (e.g. in restaurants) can no longer count towards the minimum wage as was previously sometimes possible. The main changes are as follows: • the adult National Minimum Wage (for those aged 22 or more) increases from £5.73 per hour to £5.80; • for 18-21 year olds the(often known as the developmental rate) NMW increases from £4.77 to £4.83; and • for 16-17 year olds (often known as the youth rate) the NMW increases from £3.53 to £3.57. Redundancy Pay Regulations were made to confirm the proposal announced in the Spring 2009 Budget to increase from £350 to £380 the maximum amount of a week's pay to be taken into account when calculating statutory redundancy pay and certain employment tribunal awards which take effect from 1st October 2009. This will be particularly important to anyone planning or implementing redundancies now where the individual employees have a relatively long notice period ie one that would result in them leaving after 1st October. Note: This increase in the capped redundancy pay rate to £380 per week means that there will be no further change in February 2010 which is the time of year the rate is usually reviewed. Effective Date of Termination There has also been a significant development in case law in respect of dismissal, which means that the effective date of termination (EDT) will be date that the employee actually reads the dismissal letter unless they have been previously told that they are dismissed. In Gisda Cyf v Barratt the Court of Appeal has confirmed that the effective date of termination of an employment contract will be the date on which the decision to dismiss is communicated to the employee. In this case, it was not effective until the employee had actually read the dismissal letter, regardless of when the letter was written, posted or delivered. This can be important not only for mundane issues like when pay stops but in terms of significant anniversaries and deadline dates which can be vitally significant in Employment Tribunal claims. This article comes from BackupHR - http://www.backuphr.com/ The URL for this story is: http://www.backuphr.com/modules.php?op=modload&name=News&file=article&sid=113