New redundancy and compensation limits for 2014-15 confirmed
The increase in compensation limits for certain employment tribunal awards have been confirmed for 2014-15. The limit on a week’s pay for statutory redundancy pay and the basic award in unfair dismissal cases is to increase from £450 to £464 from 6 April 2014, and the maximum compensatory award for unfair dismissal claims is to rise from £74,200 to £76,574. An additional cap of 52 weeks’ pay has been in force since 29 July 2013; the limit which applies for compensatory awards is the lower of the two caps in each particular case.
The new limits will apply to dismissals which take effect on or after 6 April 2014. If the dismissal occurs before this date, the old limit still applies, even if compensation is awarded after that date.
Previously, new limits came into effect from 1 February, but under the Enterprise and Regulatory Reform Act 2013 this was amended to 6 April in line with other statutory increases. The Act also provided for this annual increase (which is linked to the Retail Prices Index) to be altered so that increases could be made to the nearest £1 rather than the nearest £10, which is why the figures are not ’round’ numbers this year. These changes under the Act did not apply to Northern Ireland, where the new rates have been rounded up to £470 (week’s pay) and £76,600 (compensatory award) respectively and so are now different to England, Wales and Scotland.
The maximum guarantee payment will rise from £24.20 to £25.00 per day (for up to 5 days in three months). Unlimited compensation continues to apply to discrimination claims, the compensatory award for whistleblowing and protected health and safety dismissals amongst others. The minimum basic award in England, Scotland and Wales for certain unfair dismissals (e.g. related to health and safety or trade union reasons) will increase to £5,676.
At Royds, our experts can advise on all matters relating to redundancy and employee rights, including the latest regulatory legislation around compensation limits.
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