Increase in UK Employment Compensation Limits


The maximum compensation that the Employment Tribunal can award for “ordinary” unfair dismissal claims will increase from 6 April 2014, as will the weekly wage figure for calculating statutory redundancy payments.

The Employment Rights (Increase of Limits) Order 2014 will come into force on 6 April 2014. As a result, for dismissals in respect of which the effective date of termination falls on or after 6 April 2014:

  • a week’s pay (for the purposes of calculating the basic award in unfair dismissal cases and statutory redundancy payments) will be capped at £464 – the current limit is £450; and
  • the maximum compensatory award for unfair dismissal will be capped at £76,564 – the current limit is £74,200. Since July 2013 there has also been a separate cap of one year’s salary on unfair dismissal awards.

Various other statutory compensation limits are also increased from April 2014. Further details are available in The Employment Rights (Increase of Limits) Order 2014.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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