Annual Tribunal Limit Increase

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Annual Tribunal Limit Increase

Key Contact: Claire Knowles

Author: Laura Spence

What is changing?

From 6th April 2023, the limits applying to certain awards of employment tribunals, and other sums payable under employment legislation will increase. Full details of the changes can be seen below, including the compensatory award and redundancy payments.

The compensatory award is going to be increasing to £105,707, previously being £93,878. It is important to note, however, that the amount awarded will depend on the individual circumstances and may be lower than the maximum.

Also, the maximum amount for a ‘week’s pay’ used to calculate statutory redundancy pay and the basic award for unfair dismissal claims will increase from £571 to £643.

So not only will employers need to be mindful of the even more costly consequence of an unfair dismissal claim, but they should also be considering increasing their budget to facilitate redundancy packages.

Why is this happening?

Under section 34(2) of the Employment Relations Act 1999 (the Act), if the retail prices index for September of a year is higher or lower than the index from the previous September, the Secretary of State is required to change the specified sums, by Order, by the percentage of the increase or decrease. Accordingly, the increase made by this Order reflects the increase in the retail prices index of 12.6% from September 2021 to September 2022.

This increased rate will be applicable to any dismissal taking effect from the 6th of April this year.

Schedule of increased rates

Statutory provisionOld limitNew limit
The amount of award for unlawful inducement relating to a trade union membership or activities for the unlawful inducement relating to collective bargaining (section 145E(3) of the 1992 Act£4,554£5,128
The minimum amount of basic award of compensation where dismissal is unfair by virtue of section 152(1) or 153 of the Act (section 156(1) of the Act)£6,959£7,836
The minimum amount of compensation where an individual excluded or expelled from a union in contravention of section 174 of the Act and not admitted or re-admitted by the date of tribunal application (section 176(6A) of the Act)£10,628£11,967
Limit on amount of guarantee payment payable to an employee in respect of any day (section 31(1) of the Act)£31£35
The minimum amount of basic award of compensation where dismissal is unfair by virtue of section 100(1)(a) or (b), 101(A(d), 102(1) or 103 of the Act (section 120(1) of the Act)£6,959£7,836
Limit on amount of compensatory award for unfair dismissal (section 124(1ZA)(a) of the 1996 Act£93,878£105,707
Limit on the weekly amount payable to an employee, pro-rated where referable for a shorter period, in respect of a debt to which Part 12 of the Act applies and which is referable to a period of time (section 186(1) and (b) of the Act)£571£643
The maximum amount of a week’s pay for the purpose of calculating a redundancy payment or for various awards including the basic additional award of compensation for unfair dismissal.£571£643

For any queries, please contact a member of the Employment team.

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