New compensation limits in force 1st February 2013

The limits on certain employment tribunal awards and other amounts payable under employment legislation will be increased from 1st February 2013.

The notable changes are:

  • The limit on the amount of a week’s pay for the purposes of calculating, among other things, statutory redundancy payments and the basic award for unfair dismissal will increase from £430 to £450
  • The maximum compensatory award for unfair dismissal goes up from £72,300 to £74,200
  • Guarantee pay increases from the rate of £23.50 a day to £24.20
  • The minimum basic award in cases where the dismissal was unfair by virtue of health and safety, employee representative, trade union or occupational pension trustee reasons will increase from £ 5,300 to £ 5,500

The new rates apply where the event giving rise to compensation or payment occurs on or after 1st February 2013.

For example, in the case of unfair dismissal, the rates apply to all dismissals where the effective date of termination falls on or after this date. Where the dismissal or relevant event falls before 1st February, the old limits will still apply, irrespective of the date on which compensation is awarded.

For more information and advice, please contact Lara Murray.