Employment Update January 2009: Compensation limits rise from 1 February

26 January 2009

Employment Group

For all dismissals taking effect on or after 1 February 2009, the limits on employment tribunal awards have been increased by the Employment Rights (Increase of Limits) Order 2008 SI 2008/3055.

The most important changes are:

  • the limit on the amount of a week's pay for the purposes of calculating, among other things, statutory redundancy payments and the basic award for unfair dismissal increases from £330 to £350;

  • the maximum compensatory award for unfair dismissal goes up from £63,000 to £66,200; and

  • the minimum basic award in cases where the dismissal was unfair by virtue of health and safety, employee representative, trade union, or occupational pension trustee reasons increases from £4,400 to £4,700.

Where the dismissal or relevant event falls before 1 February, the old limits will still apply, irrespective of the date on which compensation is awarded.