From 6 April 2023, new increased compensation limits for employment tribunal claims and other amounts payable under employment legislation will come into force. What are the key increases that you need to be aware of?
The Employment Rights (Increase of Limits) Order 2023 will increase the maximum amount of a “week’s pay” from £571 to £643 from 6 April 2023. A week’s pay is used to calculate statutory redundancy pay, as well as payments to employees in the event of insolvency and various tribunal awards, including the unfair dismissal basic and additional awards.
The other key increases are:
- the limit on the daily amount of statutory guarantee pay will increase from £31 to £35
- the limit on the amount of the unfair dismissal compensatory award will rise from £93,878 to £105,707 (there is an additional cap of one year’s gross salary on the compensatory award)
- the minimum basic award for certain unfair dismissals, such as dismissals due to trade union membership or activities, for carrying out activities as health and safety or employee representative or for carrying out duties as an occupational pension scheme trustee, will go up from £6,959 to £7,836.
The increases apply where the event giving rise to the entitlement to compensation or other payment occurs on or after 6 April 2023. The sums previously in force under the 2022 Order will continue to apply where the relevant event is before 6 April 2023.
The increases made by the Order reflect the increase in the retail prices index (RPI) of 12.6% from September 2021 to September 2022.