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18 December 2012

New compensation limits announced

New limits for compensation awards by employment tribunals have been announced and will take effect from 1 February 2013.

On 1 February 2013, the maximum compensatory award for unfair dismissal will rise from £72,300 to £74,200 and the maximum amount of a statutory week’s pay, used to calculate statutory redundancy pay (among other things), will rise from £430 to £450.

The figures reflect an RPI increase of 2.6% in the year to September 2012.

Summary of changes:

  • Maximum compensatory award for unfair dismissal: increasing from £72,300 to £74,200
  • Maximum limit on a week’s pay: increasing from £430 to £450
  • Minimum basic award for certain unfair dismissals (dismissals for reasons of trade union membership or activities, health and safety duties, pension scheme trustee duties or acting as an employee representative): increasing from £5,300 to £5,500
  • Maximum basic award or statutory redundancy payment: increasing from £12,900 to £13,500

These new rates will apply in instances where the effective date of termination falls on or after 1 February 2013.

For any employment enquiries please contact the Steeles Law employment team on employment@steeleslaw.co.uk or 01603 598000.