The limit on a ‘week’s pay’ and the various maximum employment tribunal awards will increase from 6 April 2020.

The  Employment Rights (Increase of Limits) Order 2020 brings in the following changes:

  • The maximum amount of a ‘week’s pay’ – used to calculate statutory redundancy pay and various other payments (e.g. the basic award for unfair dismissal) – increases from £525 to £538.
  • The maximum compensatory award for unfair dismissal increases from £86,444 to £88,519. The upper limit remains the lower of a year’s salary or the maximum statutory limit.
  • The limit on the daily amount of guarantee payments increases from £29 to £30 per day.
  • The minimum basic award in cases where a dismissal is unfair by virtue of health and safety, employee representative, trade union, or occupational pension trustee reasons increases from £6,408 to £6,562.

The new rates apply where the event giving rise to compensation or payment occurs on or after 6 April 2020. Where the dismissal or relevant event falls before 6 April, the old limits will still apply, irrespective of the date on which compensation is awarded.