Unfair dismissal compensation limit passes £100,000 mark

Tribunal limits – the maximum amount of money which can be awarded to a Claimant at an Employment Tribunal – are revised each year in line with the Retail Prices Index (RPI) inflation rate.

The changes typically come into force each April, and are based on the RPI inflation rate from the previous September.

The Employment Rights (Increase of Limits) Order 2023 has now been published, stipulating the annual increases in the tribunal limits.

Statutory redundancy pay and the basic award for unfair dismissal claims are calculated with regards to the employee’s ‘weekly pay’. The maximum statutory weekly pay has now risen from £571 a week to £643.

If an employee successfully claims unfair dismissal, then they may be entitled to compensation. The maximum award has now increased from £93,878 to £105,707.

Compensation is calculated based upon a variety of individual circumstances, and it’s worth saying that a Claimant may be awarded much less than the maximum amount permitted.

The effects of the Employment Rights (Increased Limits) Order 2023 will commence on April 6th 2023. The effective Date of Termination needs to be on or after April 6th 2023 for the new rates to be applied.

Please see our February 2023 newsletter for more information regarding the Date of Termination.