The government has announced the annual increases to compensation awards and statutory redundancy payments in the Employment Tribunal, effective from 6 April 2023.
The Employment Rights (Increase of Limits) Order 2023 includes the following new amounts:
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The cap on one week’s pay increases to £643 (currently £571). This is typically used when calculating a Statutory Redundancy Payment or Basic Award for unfair dismissal.
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The maximum compensatory award for unfair dismissal increases to £105,707 (currently £93,878). This new amount will apply where the effective date of termination is on or after 6 April 2023 (the cap of one year’s gross salary remains if lower than the maximum).
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The minimum basic award for certain unfair dismissals (including health and safety dismissals, dismissals due to trade union membership, for carrying out activities as an employee representative or for carrying out duties as an occupational pension scheme trustee) increases to£7,836 (currently £6,959).
These increases are based on the retail prices index (RPI) which increased by 12.6% compared to the previous year (between September 2021 and September 2022).
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