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Employment Tribunal Compensation Limits to Increase From April 24

Date Added 27.03.24

The annual increase regarding Compensation limits relating to employment tribunal awards and other statutory payments was recently published by the government in ‘The Employment Rights (Increase of Limits) Order 2024’.

These new figures, if approved by parliament, will come into force from 6th April 2024.

These increases reflect the rise in the retail prices index (RPI) from September 2022 to September 2023 of 8.9%.

They will apply when the event giving rise to the reason for compensation or other payment takes place on or after 6th April 2024 and will be enforceable in England, Wales and Scotland.

If the reason for compensation or other payment took place prior to 6th April 2024, then the previous limits will be used.

Below we have listed some of the most relevant and important changes. The full list of increases is contained in The Employment (Increase of Limits) order 2024, here.

 

Subject
Old Limit
New Limit
Maximum amount for a week’s pay for calculating redundancy payment or for basic or additional awards of compensation for unfair dismissal. £643 £700
Limit on the amount of compensatory award by reference to loss of earnings, benefits and other financial losses for unfair dismissal. £105,707 £115,115
Limit on the amount of guarantee payment payable to an employee in respect to any day. £35 £38
Minimum amount of basic award of compensation where dismissal is unfair. £7,836 £8,533

 

For redundancy claims the statutory cap on one week’s pay for the purpose of calculating the statutory redundancy payment is now £700. The statutory redundancy payment will be the statutory cap or a week’s pay depending on which is the lesser of the two.

The limit on the amount of compensatory award in regard to loss of earning will be either 52 week’s pay or the above fixed amount, whichever is the lesser amount.

The limit on a week’s pay is important, especially if as an employer you are going through the redundancy process and where any employee dismissals will, or may, take effect on or after 6 April 2024, as any redundancy payments would need to be updated to consider the increase in the limit on a week’s pay.

Where there is a case of unfair dismissal the new figures will apply if the effective date of termination is on or after 6th April 2024. The effective date of termination is either when the employee’s notice expires or the date on which termination takes place if the employee is dismissed without notice.

Talk to Tollers

It is important that employers are aware of these new figures, to ensure that the route chosen in pursuing or defending a possible claim is the most financially viable one for the business. Going to tribunal may not be the best route given these rises and it may be better to look at a settlement agreement as a possible option instead.

If you require any assistance with a redundancy situation or unfair dismissal claim or would like to understand more regarding ‘The Employment Rights (Increase of Limits) Order 2024’ and the implications for your business…Talk to Tollers on 01604 258558, our experienced Employment team are here to help with all your employment law needs.

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