The compensation limits on Tribunal awards will increase as of 1 February 2013. The key changes are set out below.
Statutory Redundancy Pay
The maximum amount permitted for calculation of a week’s pay will rise from £430 to £450; the maximum entitlement to Statutory Redundancy Pay will therefore rise from £12,900 to £13,500.
The current maximum amount for a week’s pay will rise from £430 to £450; the maximum Basic Award will therefore rise from £12,900 to £13,500 (which would be awarded to an employee aged 61+ with 20+ years service).
Minimum Basic Award for Defined Dismissals
The minimum Basic Award a Tribunal can award for certain dismissals, i.e., those relating to certain employee representative, health and safety and working time cases, will rise from £5,300 to £5,500.
Maximum Compensatory Award
The maximum Compensatory Award a Tribunal can award in most cases of unfair dismissal will rise from £72,300 to £74,200.
The maximum total award for unfair dismissal (i.e. maximum unfair dismissal compensation plus maximum basic award) will therefore rise from £85,200 to £87,700.
What Does This Mean for Employers?
The changes will take effect on 1 February 2013 and will be applicable to dismissals taking effect on or after that date.
It is important for employers to note that:
Employers’ exposure in the event of an unfair dismissal claim will rise and should be factored into decision making regarding litigation or settlement strategies.