New Compensation Limits Announced

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The Employment Rights (Increase of Limits) Order 2014 has been published increasing limits on some employment tribunal awards and the amounts payable under employment legislation with effect from 6th April, 2014.

The most significant changes are as follows:

  • The cap on a week’s pay for statutory redundancy payment and the basic award for unfair dismissal will increase to £464 (previously £450).

  • The maximum compensatory award for unfair dismissal increases to £76,574 (previously £74,200). However since 29th July 2013, there has been an additional limit of one year’s salary on the unfair dismissal compensatory award.

  • Guarantee pay increases to £25 per day (previously £24.20).

  • The minimum basic award where a dismissal was unfair in relation to health and safety, employee representative, trade union or occupational pension trustee reasons will increase to £5,676 (previously £5,500).
These new rates apply to events that give rise to a payment when the payment occurs on or after 6th April, 2014. For example, a redundancy payment must be paid at the increased rate if the effective termination date is on or after this date.

Please note that these figures are not applicable in Northern Ireland.

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