The latest annual increases to the compensation limits for Employment Tribunal awards and other statutory rates, such as statutory sick pay and the national minimum wage, have been announced by the Government.
The increases will come into effect from 6th April 2024 and are outlined in The Employment Rights (Increase of Limits) Order 2024, which has been published to reflect the increase in the Retail Prices Index (RPI) of the last year.
The main increases are:
- The maximum award for unfair dismissal, which is increasing from £105,707 to £115,115;
- The limit on a week’s pay, which is being raised from £643 to £700;
- The minimum basic award for some forms of unfair dismissal, which will increase from £7,836 to £8,533; and
- The statutory guarantee pay, which will rise from £35 per day to £38 per day.
The increases to the compensation limits still require Parliamentary approval.
Advice to employers
As per last year, due to the current inflationary situation, the increases outlined above are significantly higher than in previous years. This is particularly the case with the compensatory award for unfair dismissal, which rose by over 12% in 2023 (up from £93,878 to £105,707) and will increase by almost 9% in 2024.
Businesses facing potential Employment Tribunal claims with events giving rise to the entitlement to compensation or other payments or an effective date of termination of 6 April 2024 or beyond need to bear in mind the significant increase to the compensatory awards, particularly with unfair dismissal claims.
Equally, when the dismissal or relevant event falls before 6 April 2024, the old limits will still apply, irrespective of the date on which compensation is awarded.
How we can help
Ruby Rai is a Senior Associate in our expert Employment Law team, advising on a wide range of employment matters, including TUPE, redundancies, and senior-level exit strategies, drafting policies, procedures, employment contracts and settlement agreements.
If you would like any advice concerning the subjects discussed in this article, please contact Ruby or another member of the team in Derby, Leicester or Nottingham on 0800 024 1976 or via our online enquiry form.
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