26th February 2014

More Compensation – Employment Rights Update

The Employment Rights (Increase of Limits) Order 2014 SI 2014/382 will come into force on 6 April 2014. The effect of this will be to increase the statutory limits on certain types of compensation which an employment tribunal can award.  For example:-

  • the statutory cap on a week’s pay for calculating statutory redundancy pay and basic awards in unfair dismissal claims will increase from £450 to £464;
  • the maximum compensatory award which a tribunal can make in unfair dismissal claims increases from £74,200 to £76,574.  It is however worth noting that the additional statutory cap introduced for claims lodged after 29 July 2013 still applies – the additional cap is one year’s pay.  Thus the lesser of the two caps will apply depending on a claimant’s salary.
  • guarantee pay rises from £24.20 per day to £25 per day; and
  • in cases of unfair dismissal due to health and safety, employee representative, trade union, or occupational pension trustee reasons, the minimum basic award increases from £5,500 to £5,676.

These new rates will apply in all cases where the event which gives rise to the compensation occurs on or after 6 April 2014 (irrespective of when the compensation is assessed by a tribunal).  So, for dismissals prior to 6 April 2014, the old rates still apply.  For dismissals after that date, the new rates take effect.

Jack Boyle
Solicitor – Employment Law

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