The TUC is calling on chancellor Alistair Darling to increase the weekly limit on statutory redundancy pay from £330 to £500 with a link to average earnings in the Budget in April.
Redundancy pay was first introduced in the UK way back in 1965 at £40 a week - more than twice the average wage of £19.60.
There is a statutory maximum limit on what counts as a week's pay. This maximum limit currently stands at £330 per week. Official figures show that more than half the working population earn more than this, with mean pay standing at £452 a week.
Statutory redundancy payments have become the norm, not only when companies go bust, but increasingly when companies make members compulsory redundant.
Unite has been pushing for an increase in the maximum limit as it does not reflect members earnings and in effect makes it cheaper to sack UK workers.
Redundancy pay is not generous in the UK and only acts a a short term "buffer" and is soon used up by working families following the loss of employment.
TUC general secretary Brendan Barber said: "Now is the right time to start to restore the value of redundancy pay. When it was introduced, the majority of the workforce had all their wages counted when working out their redundancy pay, but now more than half the workforce would lose out. A one-off rise to £500 and a link to earnings rather than prices in future is the minimum we need to see to start to restore some fairness."