Changes to Compensation Limits Announced

Further potential cost increases are on their way for employers in April. The annual increase to limits on certain tribunal awards and employee entitlements have been announced.

 

What Employers Need to Know?

 

  • The maximum compensatory award for unfair dismissal is increasing from £89,493 to £93,878.

 

Did you know? The majority of employees will not be able to receive sums in the region of that amount. This is because the rules regarding the compensatory award mean that the employee is limited to receiving whichever is the lower of £89,493 (increasing to £93,878) or one year’s salary. However, there are some exceptions, for example whistleblowing cases, where there is no limit on the amount of compensatory award that can be ordered.

 

  • Statutory redundancy pay will increase for some employees. This is because the limit on a week’s pay which is relevant for calculating statutory redundancy pay is increasing from £544 to £571.

 

Did you know? Our redundancy pay calculation table helps employers work out their statutory redundancy pay. Get in touch to find out more.

 

  • The statutory guarantee pay limit is increasing from £30 to £31 per day (subject to a maximum of five days guarantee pay in any three months).

 

Did you know? Statutory guarantee pay is most commonly payable when an employee has a workless day because they are laid-off by their employer or they are placed on short time working. If you are considering taking such action, it’s important to seek advice on the facts of your situation before doing so.

 

When is it happening?

The new limits will apply where the event that gives rise to the award or payment occurs on or after 6th April 2022.

 

Employment Law Issue?

If you have any employment law matters you would like assistance with, please do not hesitate to contact us as we are happy to help.

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