Changing Compensation Limits and Payments for Employees that Employers should be aware of
There are various reasons as to why employers should keep abreast of changing compensation limits at tribunal and statutory minimum payments for employees. This can help employers determine an appropriate termination payment in Settlement Agreements and assist with the accurate calculation of redundancy pay-outs for employees.
Various compensation limits and maximum weekly payment will increase on 6 April 2015 under the Employment Rights (Increase of Limits) Order 2015 (SI 2015/226). The most noteworthy for employers are, as follows:
The limit on compensation for unfair dismissal will increase from £76,574 to £76,574; the recent legislation change providing that for employment terminations on or after 29 July 2013, the maximum compensatory award is the lower of, the above cap or 52 weeks’ pay, remains unchanged.
The maximum amount of a week’s pay used to calculate statutory redundancy payments and various awards, also rises from £464 to £475.