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New Compensation Limits

The limits on certain employment tribunal awards and other amounts payable under employment legislation will increase from 6 April 2014. The main increases are:

  • The limit on the amount of a week's pay for the purposes of calculating statutory redundancy payments and the basic award for unfair dismissal will be £464 (up from £450).
  • The maximum compensatory award for unfair dismissal will be £76,574 (up from £74,200). With the additional cap of one year’s salary (introduced on 29 July 2013), this means that the maximum compensatory award for unfair dismissal will be the lower of one year’s salary or £76,574.
  • The rate of guarantee pay will increase from £24.20 a day to £25.

These new rates apply by reference to the date when the event giving rise to the claim occurs, and not by reference to the date when the claim is lodged or when the compensation is awarded. For example, the new limit for compensatory awards for unfair dismissal applies to all dismissals where the effective date of termination falls on or after 6 April 2014.

For more information please contact Martin Sinclair or Nicola Gray or call on 01224 632464.

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