The only way is up: Compensation Limits for Employment Tribunal claims and the National Minimum Wage are both set to rise

Compensation Limits

It has been confirmed that the maximum limits for compensation in Employment Tribunal claims will increase from 6 April 2022 (in relation to dismissals that take place on or after that date).

Where an employee is found to have been unfairly dismissed, an Employment Tribunal may award compensation in the form of a basic award and a compensatory award. The formula when calculating the basic award is the same as that for calculating a statutory redundancy payment – it is based on the employee’s age, length of service and weekly pay.

For the purposes of calculating the basic award in a successful unfair dismissal claim, as well as when calculating statutory redundancy pay, a statutory cap is placed on weekly pay. The cap on “a week’s pay” for these purposes will increase to £571, up from £544.

The maximum compensatory award will also rise to £93,878 from £89,493.

National Minimum/Living Wage

The National Minimum Wage for an apprentice or those under the age of 23 and the National Living Wage for those over the age of 23 are due to rise on Friday 1 April 2022.

The new rates are as follows, and will apply to anyone who is employed as an employee or worker:

For further advice on employment related issues, please contact Ashfords’ Employment Team. For more information on this article, please contact Laura Wonnacott or Sophie Borrie.