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New Compensation Limits from 6 April 2017

31st March 2017

Every year the Government introduces rules that set the compensation limits that apply in the Employment Tribunals and in respect of statutory redundancy payments.

The new figures take effect from the 6th April 2017. They will therefore only effect the valuations of award in the Tribunal, and any statutory redundancy payment calculation where the dismissal or redundancy takes place on or after the 6th April 2017, (ie irrespective of the date of any Employment Tribunal hearing on the dismissal).

The changes include the following:-Increase in the maximum compensatory award for unfair dismissal from £78,962 to £80,541.The maximum figure for “a week’s pay” for calculating statutory redundancy payments and the basic award for unfair dismissal rises from £479 to £489.“Guarantee payment” will increase from £26 to £27 per day (the number of days for which this is payable is limited).The minimum basic award in cases where a dismissal is unfair by virtue of health and safety, employee representatives, trade union activity, or occupational pension trustees reasons will increase from £5,853 to £5,970.

As a result of these new limits, the maximum statutory redundancy payment will rise from £14,370 to £14,670. 

Employers need to be aware of the changes to ensure that the correct statutory redundancy payment is made to any employee whose role becomes redundant on or after the 6thApril 2017. Similarly any employer that provides for a top-up or enhancement to redundancy payments needs to be aware of the new limits in order to take them properly into account when calculating any enhancement. It should also be remembered that the maximum compensatory award figure is exactly that, and the actual figure for any employee that has an annual income of less than the new maximum will still be limited to that lower annual pay figure.

If you need any further advice on any matter raised in this article do not hesitate to contact us at Hallett Employment Law Services Ltd.

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