Employment claims - compensation limits change

Changes to the compensation limits awarded by Employment Tribunals to increase from 06 April 2018.

A number of the compensation limits which may be awarded by employment tribunals are reviewed annually.

The following limits have effect in any case where the appropriate date falls on or after 06 April 2018:

  • limit on amount of compensatory award for unfair dismissal: to rise from £80,451 to £83,682 (note subject to the further cap so that the limit is the lower of £83,682 or 52 weeks’ pay)
  • minimum amount of basic award where reason for dismissal is one listed below: to rise from £5,970 to £6,203:
    • carrying out duties as health and safety representative
    • carrying out duties as a representative (or candidate) in relation to working time matters
    • carrying out duties as a trustee of an occupational pensions scheme
    • performing functions or activities as an employee representative (or candidate)
    • trade union membership or activities, or
    • selection for redundancy on grounds related to trade union membership or activities.

A week's pay for the purposes of calculating the awards below will rise from £489 to £508:

  • redundancy payments
  • basic awards for unfair dismissal
  • additional awards of compensation for unfair dismissal
  • payments payable on the insolvency of an employer (including arrears of pay and holiday pay)
  • awards of compensation for a failure to deal correctly with a right to request a contract variation made under the statutory procedure
  • where an employee is unfairly dismissed because the statutory retirement procedure has not been followed and an order is made for reinstatement or reengagement.

The increase in the amount of a week’s pay means that the maximum basic award for unfair dismissal will rise from £14,670 to £15,240.

Transitional provisions apply in relation to the increase. The increased rate does not have effect in relation to a case where the "appropriate date" falls before 06 April 2018 with the "appropriate date" being defined in relation to each of the specific awards.

This document (and any information accessed through links in this document) is provided for information purposes only and does not constitute legal advice. Professional legal advice should be obtained before taking or refraining from any action as a result of the contents of this document.