On 6 April 2014, there will be a number of increases to the maximum awards that can be claimed in a tribunal.
The maximum compensatory award for unfair dismissal will rise from £74,200 to £76,574. The maximum amount of a week’s pay, used to calculate redundancy payments or various awards including the basic or additional award of compensation for unfair dismissal, also rises from £450 to £464.
In cases involving dismissal the new figures will apply where the effective date of termination falls on or after the 6 April. The current figures will continue to apply to dismissals where the effective date of termination is before the 6 April 2014.
|Compensation limit||Prior to 6 April 2014||From 6 April 2014|
|Maximum compensatory award for unfair dismissal||£74,200||£76,574|
|Maximum limit on a week’s pay||£450||£464|
|Minimum basic award for certain unfair dismissals (dismissals for reasons of trade union membership or activities, health and safety duties, pension scheme trustee duties or acting as an employee representative)||£5,500||£5,676|
What does this mean for employers?
If employers are planning on making any redundancies or are currently in consultation with employees for redundancies to take effect after the 6th April, the new figures must be used in calculating the maximum limit of a week’s pay.
In assessing the risks involved in making any dismissals after the 6th April 2014 employers should be aware that the maximum award has increased, thus increasing their financial exposure in a successful unfair dismissal claim.
For further information on employment or tribunal issues, please contact our Employment and HR team on 0161 475 7666.