09 Mar 2016

BIS announces increase to UK employment compensation limits

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The Employment Rights (Increase of Limits) Order 2016 was laid before Parliament last week, announcing amendments to the calculation of statutory redundancy payments and "ordinary" unfair dismissal compensation.

Where an individual's effective date of termination of employment falls on or after 6 April 2016, the new increased rates will apply.

The main changes outlined in the Order are:

  • Increase to calculation of a week's pay for the purposes of calculating the basic award in unfair dismissal claims and statutory redundancy payments from £475 to £479; and
  • Increase to the maximum compensatory award for unfair dismissal from £78,335 to £78,962.

It is important to note that any dismissals preceding 6 April 2016 will be subject to the old rates, irrespective of when the claim is heard.

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