Following on from my blog last month, I can now confirm that increases to the maximum compensatory award and a week’s pay have been announced.
From 6 April 2014, a week’s pay (used for calculating statutory redundancy entitlement and certain tribunal awards) will rise to £464 (currently £450) and the maximum compensatory award for an unfair dismissal claim will rise to the lower of either a years’ pay or £76,574 (currently £74,200).
The increases which are in line with current inflation rates are not unexpected but they will no doubt be unwelcome for employers as it will mean an increase in the cost of making redundancies (the maximum statutory redundancy payment will increase to £13,920) and in some cases it will increase the financial risk of an unfair dismissal claim with the maximum potential compensation award increasing to £90,494 (including basic award and compensatory award).
These increases, together with the introduction of penalties for losing employers on 6 April 2014 (see my previous blog) further highlights the need for employers to “get it right” at the outset so as to avoid facing what could be a crippling financial risk.
The new rates will apply to events which give rise to compensation that occur on, or after, 6 April 2014. The old limits will apply to cases where the event occurred before 6 April 2014.
0 Comments