Good to know – handy checklist for new limits and rates

As from 6 April 2017, various rates and limits change as they are index linked.  Here’s our handy reference on compensation limits, statutory redundancy rates and minimum basic awards.

Tribunal compensation limits

The maximum compensatory award for unfair dismissal will rise from £78,962 to £80,541.

The maximum amount of a week’s pay, which is used to calculate statutory redundancy payments as well as the basic and additional awards for unfair dismissal, also rises from £479.00 to £489.00.

However, it should not be forgotten that the statutory cap on compensation for unfair dismissal is also limited by the amount that the Employee would earn over 52 weeks.  Therefore, the cap of £80,541 is only of interest to those Employees who earn at least that amount per year.  In other words, an employee who only earns £25,000 per year is not affected by this change.

How age affects maximum statutory redundancy payments

For employees who are aged over 41, they are entitled to be paid a basic award of 1.5 weeks for every year of service over that birthday, which will be £733.50 per week.  Employees between 18-22 will see their basic awards capped at £244.50, being half of the weekly award.

Therefore, the maximum statutory redundancy payment that can be made with the new rate will be £14,670 which would be paid to an employee over 41 years of age with 20 or more years of service with the employer.

The new rate only applies for those Employees whose effective date of termination falls on or after 6 April 2017.  For any employees whose employment ends before that date the current rates apply.

Minimum basic award for certain types of unfair dismissal

Many people overlook that there is a minimum basic award for certain types of unfair dismissal such as for exercising Health & Safety duties, dismissal for Trade Union membership or activities or for carrying out Pension Scheme Trustee duties.  The minimum award will increase from £5853.00 to £5970.00 from 6 April 2017.

Unfair dismissal claims vs discrimination claims

The statutory cap on unfair dismissal claims does not apply to discrimination claims.  Therefore, a victim of discrimination could theoretically be awarded a much greater sum than that for unfair dismissal if they could prove their loss is as a result of a discriminatory conduct.