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22nd March 2021

Annual increase to employment compensation limits

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With effect from 6 April 2021 there will be increases to certain employment compensation limits, the key changes will include:

  • the maximum compensatory award for unfair dismissal will be the lower of 12 months’ salary or £89,493 (up from £88,519); and
  • the limit on a week’s pay for the purposes of calculating statutory redundancy payments and the basic award for unfair dismissal will increase to £544 (up from £538).

Consequently, the maximum statutory redundancy payment will increase to £16,320.

The new rates will apply where an individual’s effective date of termination of employment falls on or after 6 April 2021.

The rates of maternity, paternity, shared parental, adoption and parental bereavement pay applicable from 4 April 2021 and the rate of sick pay applicable from 6 April 2021 will be as follows:

  • maternity/paternity/shared parental/adoption/parental bereavement pay will increase from £151.20 to £151.97; and
  • sick pay will increase from £95.85 to £96.35.

From 1 April 2021, national minimum wage rates are also set to increase.

For more information please contact Charlotte Herrington by clicking here.