The Employment Rights (Increase of Limits) Order 2023 (SI 2023/318) is set to revise compensation limits for certain tribunal awards, as well as other statutory payments, from 6 April 2023.
The new figures have been based on the retail prices index from September 2022, which increased by 12.6% from the previous year.
The Order outlines the new figures as follows:
- The limit on a week’s pay will increase from £571 to £643 (which is used for calculating various awards including statutory redundancy payments and unfair dismissal basic awards);
- The maximum compensatory award for unfair dismissal will increase from £93,878 to £105,707;
- The minimum basic award for certain unfair dismissals (including health and safety dismissals) will increase from £6,959 to £7,836.
The new limits will apply where the effective date of an employees’ termination falls on or after 6 April 2023. Where the dismissal or relevant event falls before 6 April 2023, the old limits will still apply irrespective of the date on which compensation is awarded.
It is important to note that whilst the maximum compensatory award has increased slightly, there are still exceptions whereby there is no limit on compensation, such as in discrimination cases or whistleblowing cases.
The statutory guarantee pay limit is also increasing from £31 to £35 per day and is still only payable for a maximum of five days in any three-month period.