Increase in UK Employment Compensation Limits

February 16, 2015

The maximum compensation that the Employment Tribunal can award for “ordinary” unfair dismissal claims will increase from 6 April 2015, as will the weekly wage figure for calculating an employee's entitlement to a statutory redundancy payment.

The Employment Rights (Increase of Limits) Order 2015 will change the calculation of statutory redundancy payments and unfair dismissal compensation in relation to dismissals where the effective date of termination falls on or after 6 April 2015:

  • A week’s pay (for the purposes of calculating both the basic award in unfair dismissal cases and statutory redundancy payments) will be capped at £475 – the current limit is £464.
  • The maximum compensatory award for unfair dismissal will be capped at £78,335 – the current limit is £76,564. Since July 2013 there has also been a separate cap of one year’s pay on “ordinary” unfair dismissal compensatory awards.

Various other statutory compensation limits are also increased from 6 April 2015. Further details are available in the Employment Rights (Increase of Limits) Order 2015.

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