With effect from 6 April 2023, certain compensation limits will be increased by the Employment Rights (Increase of Limits) Order 2023 reflecting a 12.6% increase in the retail prices index in the 12 months to September 2022. These new limits apply where the event giving rise to the claim in question, for example the termination of employment, occurs on or after 6 April 2023. The key increases include;
- The cap on a week’s pay for the purposes of calculating both the basic award in unfair dismissal cases and statutory redundancy payments will be increased from £571 to £643. This means that the maximum basic award for unfair dismissal and the maximum statutory redundancy payment will increase from £17,130 to £19,290;
- The minimum basic award for unfair dismissal in health and safety, employee representative, trade union and occupational pension trustee cases will increase from £6,959 to £7,836; and
- The maximum compensatory award for unfair dismissal will rise from £93,878 to £105,707 (in each case, the maximum award would be one year’s gross pay if this is lower than these figures). The cap on compensation does not apply to certain dismissals (including those arising due to unlawful discrimination or whistleblowing).