Increase in compensation limits

Increase in compensation limits

From 6 April 2017, The Employment Rights (Increase of Limits) Order 2017 SI 2017/175 will come into force and will increase the compensation limits and minimum awards that are payable under employment legislation.

The most notable changes include:

  • an increase to the limit on compensation for unfair dismissal from £78,962 to £80,541
  • the limit on a week’s pay for the purposes of calculating, among other things, statutory redundancy payments and the basic award for unfair dismissal, will increase to £489.
  • the minimum basic award in cases where a dismissal is unfair due to health and safety, employee representative, trade union, or occupational pension trustee reasons will increase from £5,853 to £5,970.
  • guarantee pay will increase from £26 to £27 per day (Section 31(1) of the 1996 Act)

The new rates take effect where the ‘appropriate date’ for the cause of action (such as the date of termination in an unfair dismissal claim) falls on or after 6 April 2017. Where the appropriate date falls before 6 April, the old limits will still apply, irrespective of the date on which compensation is awarded.

Link to Order: http://www.legislation.gov.uk/uksi/2017/175/contents/made

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