Duncan Lewis

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New compensation limits under Employment Rights coming into force from 1 February

Date: (18 December 2012)    |    

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The Employment Rights (Increase of Limits) Order 2012 would become active from the 1st of February 2013 increasing the limits on certain employment tribunal awards and other money payable under the employment legislation from the appropriate dates.

Some important changes that the 2012 Order has are the limit on the amount of a week’s pay for the purposes of calculating the basic award for unfair dismissal and statutory employment redundancy (payments and other awards / payments where statutory cap applies) would increase from £430 to £450.

The maximum compensatory award for unfair dismissal is to go up from £72,300 to £74,200.

Under Section 31 of the Employment Rights Act 1996, where an employee is not provided with work throughout a day during which he would normally be required to work under his contract of employment the mandatory guaranteed payment to be given would be increased from £ 23.50 per day to £24.20.

In cases where unfair dismissals were carried out by the virtue of activities as a health and safety representative, acting as an employee or workforce representative in specified matters, trade union membership or activities, or occupational pension trustee reasons, the increase would from £5,300 to £ 5,500.

The new rates would be applicable for those claims, as set out under Article 4 of the Order, occurs on or after 1 February 2013.

For instance in the case of unfair dismissal the rates apply to all dismissals where the effective date of termination falls on or after the 1 February. Where the appropriate date falls before this date, the old limits would still apply, irrespective of the date on which compensation is awarded.