This is a cross-posted article, originally written on the Pure Employment Law Website and has now been posted here. Please note the date on which this article was posted originally and that any information within may have changed.
29 March 2023
From 6 April 2023 the rates and limits for employment claims will have their annual increase. The new rates will apply where the effective date of termination (EDT) of the employment of an employee is on or after 6 April 2023.
The new rates will see the maximum compensatory award go above £100,000 for the first time – but it is important to remember that in practice, the compensatory award is capped at 52 weeks’ pay, if that is lower.
The limit on a week’s pay is relevant to employers’ calculations of statutory redundancy payments as well as for the basic award in unfair dismissal cases.
The new rates are as follows:
- Compensation limit
- Current figure
From 6 April 2023
- Maximum limit on a week’s pay £571 £643
- Maximum compensatory award for unfair dismissal # £93,878 * £105,707 *
- Minimum basic award for specific types of unfair dismissals (including health and safety dismissals) £6,959 £7,836
- The maximum compensatory award applies to most unfair dismissal claims, but there is no maximum if the dismissal qualifies as automatically unfair (such as for health and safety reasons or whistleblowing)
* The maximum compensatory award has increased, but as stated above is also limited to a payment of 52 weeks’ pay, if that is lower than the maximum.
If you are dealing with an Employment Tribunal claim, then we can help.
Please note that this update is not intended to be exhaustive or be a substitute for legal advice. The application of the law in this area will often depend upon the specific facts and you are advised to seek specific advice on any given scenario.