Maximum unfair dismissal compensatory award to increase

The maximum compensatory award for unfair dismissal increases from £68,400 to £72,300 where the effective date of termination occurs on or after 1 February 2012. 

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 RPI for the previous September, the Secretary of State is required to change the limits that apply to certain employment tribunal awards and other amounts payable under employment legislation by the same percentage as the change in the RPI. There was a 5.6% increase in the RPI from September 2010 to September 2011. 

An Order increasing the limits of the relevant awards has been published. The rise in the limits include:

  • the limit on the amount of the compensatory award for unfair dismissal, from £68,400 to £72,300;
  • the maximum amount of a week's pay used to calculate a statutory redundancy payment and the basic and additional awards for unfair dismissal, from £400 to £430;
  • the minimum compensation where an individual is excluded or expelled from a union in contravention of s.174 of the Trade Union and Labour Relations (Consolidation) Act 1992, and not admitted or readmitted by the date of the tribunal application, from £7,600 to £8,100; and
  • the limit on the amount of a guarantee payment payable to an employee in respect of any day, from £22.20 to £23.50. 

The increases to the limits apply where the event that gives rise to the award occurs on or after 1 February 2012. 

Also

The XpertHR quick reference section pulls together in one place key employment law facts, including the maximum amounts payable in various compensation claims and a redundancy payment reckoner that can be used to calculate statutory redundancy payments.