EMPLOYMENT LAW UPDATE: New Compensation Limits From 6 April 2017

Dispute Resolution

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The new Employment Rights (Increase of Limits) Order 2017 SI 2017/175 (link below)  will increase the compensation limits and minimum awards that are payable under employment legislation from 6 April 2017.

Some important changes include:

  • Unfair dismissal: an increase to the limit on compensation from £78,962 to £80,541
  • Statutory calculation for redundancy & basic award for unfair dismissal: the limit on a week’s pay  will increase from £479 to £489
  • Guarantee pay: An increase from £26 to £27 per day
  • Minimum basic awards:  where a dismissal is unfair by virtue of health and safety, employee representative, trade union, or occupational pension trustee reasons, the award will increase from £5,853 to £5,970.

The new rates take effect where the ‘appropriate date’ for the cause of action (such as the date of termination in an unfair dismissal claim) falls on or after 6 April 2017. 

The old limits still apply for those cases where the appropriate date is prior to 6 April 2017. 

Link to Order: http://www.legislation.gov.uk/uksi/2017/175/contents/made