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24 Feb 2017

Annual increase to employment compensation limits announced


The Employment Rights (Increase of Limits) Order 2017 has been laid before Parliament, setting out increases to the compensation limits and minimum awards payable under employment legislation with effect from 6 April 2017.

The main changes are as follows:

  • the maximum compensatory award for unfair dismissal will be the lower of 12 months' salary and £80,541 (up from £78,962);
  • the limit on a week’s pay for the purposes of calculating statutory redundancy payments and the basic award for unfair dismissal increases from £479 to £489; and
  • the minimum basic award in cases where a dismissal is unfair by virtue of health and safety, employee representative, trade union, or occupational pension trustee reasons will increase from £5,853 to £5,970.

The new rates will apply where an individual's effective date of termination of employment falls on or after 6 April 2017. The old limits will still apply in respect of any dismissals which take place before 6 April 2017, irrespective of the date on which compensation is awarded.



Paul Reeves

Paul Reeves
Head of employment

T:  +44 20 7809 2916 M:  +44 7919 694 135 Email Paul | Vcard Office:  London