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Jersey employers take note: statutory redundancy and minimum wage increases

28 September 2021

Redundancy: increase in the maximum statutory redundancy entitlement

In Jersey, subject to the completion of two (2) continuous years of service with an employer, where an employee is dismissed as a result of their role having become redundant, they are entitled to a statutory redundancy payment equivalent to one week's pay for each completed year of service. This is an entitlement enshrined under the Employment (Jersey) Law 2003, as amended and is an obligation imposed on all employers to pay to their employees in the event of redundancy.

But the amount of "one week's pay" is subject to a cap.

With effect from Tuesday, 28 September 2021, Jersey's maximum statutory redundancy rate for a week's pay has increased from a cap of £780 to a cap of £820 per week. This cap is equal to the recently released mean average earnings of Jersey employees.

To qualify for a statutory redundancy payment, an employee must have completed a minimum of two years' continuous service with an employer. There is no upper limit on the number of years' service which qualify.

Minimum wage: increase due in January 2022

Separately, if approved by the States Assembly in October, Jersey's minimum wage will increase for those employees who are above school leaving age from £8.32 to £9.22 an hour with effect from 1 January 2022. The lodged proposal may be found here.

Whilst this seems like a significant jump (of around 10.8%), the proposed increase reflects both the reality that due to the recent Covid-19 pandemic there has not been an increase in the minimum wage since April 2020 and the desire on the part of the States Assembly to ensure that employees on the minimum wage reach receive 45% of mean average earnings.

Watch this space in October for a further update on the outcome of the next debate before the States Assembly.

If you would like any further information please get in touch with one of the contacts listed.

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Location: Jersey

Related Service: Employment Law