Limits on Tribunal Awards and Statutory Payments to Increase from April 2019

Employment Tribunal compensation limits will increase on 6 April 2019.

The maximum amount of a week's pay, used to calculate statutory redundancy payments and various awards including the basic and additional awards for unfair dismissal and awards relating to a failure to provide employees with minimum required written particulars of employment, will rise from £508 to £525.

The cap will rise

As a reminder, where a week’s pay would otherwise be below the maximum limit, in accordance with current case law, employer pension contributions are required to be taken into account when calculating the weekly pay figure.

The maximum compensatory award that applies in most cases of unfair dismissal is an amount equal to the employee’s gross basic annual pay, subject to a cap. This cap will rise from £83,682 to £86,444.

As a reminder, there is no maximum compensatory award where the unfair dismissal relates to the making of a protected disclosure (“whistleblowing”) or the carrying out of certain health and safety activities.

The above increases will apply in relation to dismissals where the effective date of dismissal falls on or after 6 April.

Date of dismissal

Bear in mind that the effective date of dismissal for statutory purposes will be later than the actual date of dismissal in the event that an employee is dismissed with less than the statutory minimum notice, but has not committed gross misconduct or another fundamental breach of the employment contract. Statutory minimum notice is nil until an employee has been employed for a month, then a week until they have been employed for two years, and then is a week for each complete year of service up to a maximum of twelve weeks.

Therefore, for example, if an employee with five or more years’ service was dismissed without notice by reason of redundancy on 4 March and paid in lieu of their entitlement to notice, as the effective date of termination for statutory purposes will fall after 5 April, the cap of £525 will apply to their weekly pay when determining their entitlement to statutory redundancy pay.

However, if the employee had been employed for, say, just four years, the cap of £508 would still apply. This would be the case even if their contractual entitlement to notice would have taken the employment beyond 5 April, had they not been paid in lieu.