United Kingdom

UK: Increase in Tribunal compensation limits and employment rates

Published: © 20-04-2023

Authors: Stephen Miller & Corinna Harris

The new limits for unfair dismissal awards and redundancy pay are:

The limit on a week’s pay, for the purposes of calculating statutory redundancy and compensation for unfair dismissal, increases to £643 (from £571)
The maximum compensatory award for unfair dismissal increases to £105,707 (from £93,878)
The maximum statutory redundancy payment increases to £19,290 (from £17,130)
The minimum basic award for certain unfair dismissals (including health and safety dismissals) increases to £7,836 (from £6,959)

These new limits will apply where the effective date of termination falls on or after 6 April 2023.

Other statutory rate increases include:

National minimum wage – hourly rate (for age 23+) increases to £10.42 (from £9.50) on 1 April 2023
Statutory sick pay increases to £109.40 per week (from £99.35) on 6 April 2023
Family leave pay (statutory maternity, adoption, paternity and shared parental pay) increases on 2 April 2023 to £172.48 per week (from £156.66) or 90% of the employee’s average earnings, whichever is lower

Key Action Points for Human Resources and In-house Counsel

In addition, Vento bands for injury to feelings awards will increase for claims presented on or after 6 April 2023. The new rates are:

Lower band: £1,100 to £11,200 for less serious cases
Middle band: £11,200 to £33,700 for cases that do not merit an award in the upper band
Upper band: £33,700 to £56,200 for the most serious cases – with the most exceptional cases capable of exceeding £56,200