Government of Jersey

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demonstrating that good governance, and clear lines of accountability and authority, are in place around decisions-making – including the reasons and basis on which a decision is made, and the action required to implement a decision
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A decision made 29 August 2014:

Decision Reference: MD-S-2014-0110
Decision Summary Title :	Redundancy Pay Order Law Drafting		Date of Decision Summary:	26 August 2014
Decision Summary Author:	Policy Principal		Decision Summary: Public or Exempt?	Public
Type of Report: Oral or Written?	Written		Person Giving Oral Report:	NA
Written Report Title :	Redundancy Pay Order Law Drafting		Date of Written Report:	26 August 2014
Written Report Author:	Policy Principal		Written Report : Public or Exempt?	Public
Subject: Law Drafting instructions - Amend the Employment (Redundancy – Maximum Weekly Amount) (Jersey) Order 2011
Decision(s): The Minister decided to request the drafting of an amendment to the Employment (Redundancy – Maximum Weekly Amount) (Jersey) Order 2011 to amend the maximum value of a week’s pay for the purpose of calculating a redundancy payment.
Reason(s) for Decision: The Employment (Redundancy – Maximum Weekly Amount) (Jersey) Order 2011 is made under the Employment (Jersey) Law 2003. The Minister’s intention is that the maximum value of a week’s pay should be set by reference to the mean average weekly earnings figure, as released by the States of Jersey Statistics Unit each year. The June 2014 report on the Index of Average Earnings reported a mean weekly average earnings figure of £670 per week. The Order must be amended to set the maximum value of a week’s pay at £670 from 1 October 2014.
Resource Implications: There are no financial or manpower implications arising from the law drafting instructions.
Action required: Policy Principal to submit drafting instructions to the Law Draftsman’s Office.
Signature:		Position:
Date Signed:		Date of Decision (If different from Date Signed):

Employment (Redundancy - Maximum Weekly Amount) (Jersey) Order 2011: Amendment: Law drafting instructions

LAW DRAFTING INSTRUCTION

Employment (Redundancy – Maximum Weekly Amount) (Jersey) Order 2011; Amendment to revise the maximum value of one week’s pay

The right to receive a redundancy payment for qualifying employees came into force on 1 January 2011. Article 60C of the Employment (Jersey) Law 2003 provides that the amount of a redundancy payment is calculated as follows:

“60C Amount of redundancy payment

(1) The amount of a redundancy payment shall be calculated by allowing one week’s pay for each year of employment during the period, ending with the effective date of termination, in which the employee has been continuously employed.

(2) For the avoidance of doubt, in this Article ‘year’ means a period of 12 calendar months.

(3) For the purposes of paragraph (1), the amount of one week’s pay shall not exceed the amount specified by Order under paragraph (4), or, if no such Order is in force on the effective date of termination, the most recent figure for the average weekly earnings published by the States of Jersey Statistics Unit at least one month before the effective date of termination (disregarding any more recent figure published less than a month before the effective date of termination).

(4) The Minister may, by Order, specify an amount for the purposes of paragraph (3).”

When Article 60C came into force on 1 January 2011, the ‘default’ position (in the absence of a Ministerial Order) applied and the maximum weekly value was the June 2010 average weekly earnings figure of £630, as published by the States of Statistics Unit in August 2010.

In August 2011, however, the Statistics Unit released two average weekly earnings figures in its June 2011 report on the Index of Average Earnings: the mean average weekly earnings figure of £650 per week and a median average weekly earnings figure of £520 per week.

It was not intended that there should be any uncertainty as to which average earnings figure applies for the purpose of a redundancy pay calculation and so an Order was made to give effect to the policy intent that the mean weekly earnings figure of £650 would apply. The Employment (Redundancy – Maximum Weekly Amount) (Jersey) Order, 2011, was made on 30 September 2011. The Order was amended on 1 October 2013 to reflect the June 2013 mean weekly earnings figure of £660.

The Employment (Redundancy – Maximum Weekly Amount) (Jersey) Order, 2011, should be amended again from 1 October 2014 to reflect the latest mean weekly earnings figure, as reported in the June 2014 Statistics Unit report on the Index of Average Earnings [1]. Where an employee’s effective date of termination is 1 October 2014 or later, the maximum week’s pay for the purpose of the redundancy pay calculation will be £670.

On 18 July 2014, the States Assembly adopted the Employment (Amendment No.8) (Jersey) Law 201-[2] which will amend the Employment Law to ensure that, for the purposes of calculating a redundancy payment, the maximum value of one week’s pay relates to the mean weekly earnings figure published by the Statistics Unit at least one month before the effective date of termination. That primary law amendment is expected to come into force by appointed day act in 2015. From that date forward, the Order will not be required to provide certainty as to whether the mean or the median average weekly earnings figure applies for the purpose of a redundancy pay calculation.

[1] http://gov.je/Government/JerseyWorld/StatisticsUnit/EmploymentEarnings/Pages/Earnings.aspx

[2] P.109/2014