New redundancy and compensation limits for 2014-15

Posted by Ruth Christy on
The increase in compensation limits for certain Employment Tribunal awards have now been confirmed for 2014-15.

The limit on a week's pay for statutory redundancy pay and the basic award in unfair dismissal cases will be increased from £450 to £464 from 6 April 2014, and the maximum compensatory award for unfair dismissal claims will rise from £74,200 to £76,574.

A further cap of 52 weeks' pay has been in force since 29 July 2013, and the limit which will apply for compensatory awards is the lower of the two caps in each particular case.

The new limits will apply to dismissals which take effect on or after 6 April 2014. If the dismissal occurs before 6 April 2014, the old limit still applies even if compensation is awarded after that date.

In previous years the limits were increased from 1 February, but under the Enterprise and Regulatory Reform Act 2013 this was changed to 6 April in line with other statutory increases.

The Act also provided for this annual increase (which is linked to the Retail Prices Index) to be altered so that increases could be made to the nearest £1 rather than the nearest £10, which is why the figures are not 'round' numbers this year.

These changes under the Act did not apply to Northern Ireland, where the new rates have been rounded up to £470 (week's pay) and £76,600 (compensatory award) respectively and so are now different to England, Wales and Scotland.

The maximum guarantee payment will rise from £24.20 to £25.00 per day (for up to 5 days in three months). Unlimited compensation continues to apply to discrimination claims, the compensatory award for whistleblowing and protected health and safety dismissals amongst others.

The minimum basic award in England, Scotland and Wales for certain unfair dismissals (e.g. related to health and safety or trade union reasons) will increase to £5,676.

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Ruth Christy
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