Maximum unfair dismissal compensation award to decrease
The maximum unfair dismissal compensation award will decrease from £66,200 to £65,300 where the effective date of termination occurs on or after 1 February 2010.
Under s.34 of the Employment Relations Act 1999, if the retail prices index (RPI) for September of a year is higher or lower than the index for the previous September, the Secretary of State is required to make an order changing the limits set out in the section, which include the limit on the unfair dismissal compensation award, the limit on a week's pay for various calculations and the limit on the amount of a guarantee payment. The new sums must be rounded up or down to the nearest 10p, £10 or £100.
The was a 1.4% decrease in the RPI between September 2008 and September 2009. The requirement to round up means that three sums are reduced, while others remain the same. The reductions are:
- the limit on the amount of compensatory award for unfair dismissal, down from £66,200 to £65,300;
- the limit on the amount of a guarantee payment in respect of any day, down from £21.50 to £21.20; and
- the minimum compensation where an individual is excluded or expelled from a union in contravention of s.172 of the Trade Union and Labour Relations (Consolidation) Act 1992, and not admitted or re-admitted by the date of the tribunal application, down from £7,300 to £7,200.
The maximum amount of a week's pay used to calculate various awards and payments, including statutory redundancy pay and the unfair dismissal basic award, increased from £350 to £380 on 1 October 2009 - a one-off increase under the Work and Families (Increase of Maximum Amount) Order 2009 (SI 2009/1903). The Order also excluded the operation of s.34 of the Employment Relations Act 1999 in relation to these limits on one occasion only should the RPI for September 2009 be higher or lower than the RPI for the previous September. The maximum week's pay for these purposes therefore remains at £380.
- Employment Rights (Revision of Limits) Order 2009 (SI 2009/3274) The uprating Order is available on the OPSI website.
Award limits and amounts payable under employment legislation from 1 February 2010 The table of employment tribunal award limits and other amounts payable under employment legislation from 1 February 2010 is available in the XpertHR quick reference section.