January 25, 2013 - Rachel Miller
The Government has set new compensation limits for redundancies and unfair dismissals in 2013. They come into force on 1st February.
The limit on a week's pay, used to calculate redundancy payments or for unfair dismissal compensation, will go up to £450 from £430. The maximum compensatory award for unfair dismissal claims will rise from £72,300 to £74,200.
Minimum basic awards have also been raised. They have risen to £5,500 from £5,300 for unfair dismissal or selection for redundancy on grounds related to union membership or activities, as well as dismissals for health and safety cases, and those concerning employee representatives and trustees of occupational pension schemes.
If the dismissal occurs before 1 February 2013, the old limit still applies even if compensation is awarded after that date.
Unlimited compensation continues to apply to discrimination claims, the compensatory award for whistleblowing and protected health and safety dismissals.
The Enterprise and Regulatory Reform Bill, currently progressing through Parliament, provides for the annual increase in compensation limits (linked to the Retail Prices Index) to be altered so that in future years increases can be made to the nearest £1 rather than the nearest £10.
Find out more about dismissal procedures and redundancy law on Law Donut.