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03rd March 2012

Increased Employment Compensation Limits

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New compensation limits for 2014/2015 have now been announced following publication of the Employment Rights (Increase of Limits) Order 2014.

The key changes include: -

  • the maximum amount of a week's pay (which is used, for example, to calculate an employee’s statutory redundancy entitlement and the basic award for unfair dismissal claims) will be increased from £450 to £464; and -
  • the maximum compensatory award for unfair dismissal claims will be increased from £74,200 to £76,574. This is subject always to the additional cap of one year’s salary which applies where the employee’s effective date of termination was on or after 29 July 2013. In such cases, where an employee’s annual salary is less than the new cap of £76,574, any compensatory award made for unfair dismissal would be capped at one year’s salary.

The increased compensation limits will come into force with effect from 6 April 2014.

For more information on the new compensation limits, please contact Lynne Adam by email or 01604 463308.

For more information on our Employment services click here.