Employment Tribunal Awards to Increase in April

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03 Mar 2017

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April 2017 certainly looks set to be one of the busier months for employers; from Gender Pay Reporting  to the increase of National Minimum wage and National Living wage.

Adding to the list, the Employment Rights (Increase of Limits) Order 2017 has announced the yearly increase to tribunal compensation limits, set to come into effect from 6 April 2017.

This includes:

  • The maximum week’s pay for calculating redundancy and unfair dismissal basic award will increase to £489;
  • The maximum basic award for unfair dismissal and statutory redundancy pay (30 weeks’ pay subject to the limit on week’s pay) will increase to £14,670;
  • Limit on guarantee payments will increase to £27;
  • The minimum award for dismissal on trade union, health and safety, occupational pension scheme trustee, employee representative and on working time grounds only will increase to £5,970;
  • The maximum compensatory award in an unfair dismissal claim will be £80,541;
  • Minimum compensation for employees excluded from a trade union will increase to £9,118;
  • Contract claims (if a claim for breach of contract) is brought in an employment tribunal, compensation is capped at £25,000. If the claim is for more than £25,000, it can be made in the county court or high court.

This increase is the first time that the maximum compensatory award for unfair dismissal has risen above £80,000, and is to apply where the effective date of termination falls on 6 April, or after.

This also means that this is the first time the maximum total award for unfair dismissal, made up of the basic award plus the compensatory award, will reach over £95,000. The significant costs presented by the update accentuate just how important it is for the correct disciplinary procedures to be followed.

For many employers, the aforementioned figures would be a substantial financial blow to an organisation. For any advice or questions, please call 01455 845132.

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