How is the maximum amount of a week's pay set for the purposes of calculating statutory redundancy pay?

The maximum amount of a week's pay for the purposes of calculating statutory redundancy pay is adjusted each year in line with changes to the retail prices index (RPI), according to a formula set out in s.34 of the Employment Relations Act 1999.

If the RPI for September is higher or lower than the RPI for the previous September, the figure for the maximum amount of a week's pay increases or decreases by the same percentage. The change to the maximum amount comes into effect on 6 April the following year.

The maximum amount of a week's pay also applies to the calculation of the basic award for unfair dismissal and some other tribunal awards.