Tribunal Compensation Limits and Statutory Payments Will Increase From 6 April 2021
The annual increases to the compensation limits on certain employment tribunal awards and to statutory payments will come into effect on 6 April 2021.
Limits on tribunal awards will increase from 6 April 2021 as follows:
- the cap on a week's pay (used to calculate the basic awards in unfair dismissal cases and statutory redundancy payments) will increase to £544 (from £538)
- the maximum compensatory award for ordinary unfair dismissal will increase to £89,493 (from £88,519)
- the minimum basic award for certain unfair dismissals (including dismissals for reasons of trade union membership or activities, health and safety duties, pension scheme trustee duties, or acting as an employee representative or workforce representative) will increase to £6,634 (from £6,562)
What Should Employers Be Aware Of?
The new figures will apply where the effective date of termination in dismissal cases and the relevant date for redundancy payments falls on or after 6 April 2021.
This means that for any redundancies taking effect on or after 6 April 2021, statutory redundancy payments will need to be recalculated in line with the increased limits.