The annual review of the maximum compensation that can be awarded in unfair dismissal and other cases has resulted in increases in the awards from 6 April
The new maximum for a ‘week’s pay’ (used to calculate the basic award in unfair dismissal cases, statutory redundancy pay and a number of other awards) increases from £571 to £643. This means the maximum basic award for unfair dismissal and the maximum amount of statutory redundancy pay (which is worked out taking into account an employee’s age, years of service and weekly pay) increase from £17,130 to £19,290.
The compensatory award also increases, from £93,878 to £105,707 (although this award is also, since 2013, subject to an alternative limit of one year’s gross pay if that is lower).
The new limits apply in the main to dismissals occurring on or after 6th April 2023.
Employers should budget for the new increases when considering whether to dismiss an employee.
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