Annual Increased Tribunal Limit: What You Need to Know
If you're an employer in the UK, you'll want to take note of the latest update to employment tribunal limits. The Employment Rights (Increase of Limits) Order 2023 has been published, which includes the regular annual increase in tribunal limits.
Here's what you need to know about the changes:
Week's Pay
The maximum amount of a 'week's pay' used to calculate statutory redundancy pay and the basic award for unfair dismissal claims will increase from £571 to £643. This means that if an employee is made redundant, their statutory redundancy pay will be calculated using a 'week's pay' of up to £643.
Compensatory Award
The maximum compensatory award for unfair dismissal claims will increase from £93,878 to £105,707. This means that if an employee successfully claims unfair dismissal, the maximum amount of compensation they can receive will be £105,707. However, it's important to note that the amount awarded is based on the individual circumstances of the case and may be lower than the maximum.
Why the Increase?
The annual increase in tribunal limits is based on the Retail Prices Index (RPI) inflation rate from September of the previous year. The RPI inflation rate for September 2022 was 5.1%, which has led to increased tribunal limits.
When does it take effect?
The new limits will take effect from 6 April 2023 and will apply to dismissals taking place on or after that date. Therefore, if the Effective Date of Termination is after 6 April 2023, the new rate will be applied.
For example, Mr. E is notified of redundancy on 15 March 2023. His Effective Date of Termination is 12 April 2023. His redundancy will be calculated using the increased limit of £643.
