Annual Increase in Compensation Limits

01 March 2022

The annual increase in compensation limits for employment matters and claims has been announced with the increased compensation limits due to come into force 6th April 2022.

The maximum amount of “a week’s pay” is set to increase from £544 to £571. This figure is used for the purpose of calculating an individual’s entitlement to a statutory redundancy payment and various other awards, including theunfair dismissal basic awards.

This means that maximum statutory redundancy payment andbasic award for unfair dismissal will become £17,130 (increased from £16,320).

Other relevant increases include:

• Maximum amount of unfair dismissal compensatory award – £93,878 (increased from £89,493). This is still capped at the lesser of the maximum compensatory award or one year’s gross pay.

• The minimum amount of unfair dismissal basic award for trade union, health and safety, working time representative pension scheme trustee and employee representative dismissal – £6,959 (increased from £6,634).

• Minimum amount for unlawful exclusion or expulsion from trade union – £10,628 (increased from £10,132).

• Maximum guarantee payment per day – £31 (increased from £30) which is used in layoff situations.

• Amount for unlawful inducement relating to trade union membership/activities or collective bargaining – £4,554(increased from £4,341).

The new limits will apply to dismissals occurring on or after 6th April 2022.

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