New employee compensation limits
01 Feb 2007
On 1 February 2007, new legislation increased the statutory compensation limits for among other things, claims of redundancy and unfair dismissal.
Employers should be aware of the new statutory limits in the event that a claim is made against them.
The main points to note are:
- The gross weekly pay limits for calculating the basic award in claims of unfair dismissal and redundancy has increased from £290 to £310.
- The total amount that can be awarded therefore will increase from £8,700 to £9,300.
* The maximum compensatory award for claims of unfair dismissal has now increased from £58,400 to £60,600.
There is no limit on the compensatory award for unfair dismissal where the employee is dismissed unfairly or selected for redundancy for reasons connected with health and safety matters or public interest disclosure (“whistleblowing”).
The new limits apply in unfair dismissal and redundancy claims, where the Effective Date of termination falls on or after 1 February 2007. However, where dismissals are contemplated close to 1 February 2007, employers should be aware that there are circumstances where the statutory rules may apply these new limits prior to the 1 February 2007.
If you would like more information on this or any employment matter, contact our team or your usual contact in the firm.