New compensation limits in force from 6 April 2018

The Employment Rights (Increase of Limits) Order 2018 SI 2018/194 has been made and will increase the compensation limits and minimum awards that are payable under employment legislation from 6 April 2018. The limit on the compensatory award for unfair dismissal will rise from £80,541 to £83,682; the limit on a week’s pay for the purposes of calculating, among other things, statutory redundancy payments and the basic award for unfair dismissal, will increase from £489 to £508; guarantee pay will increase from £27 to £28 per day; and the minimum basic award in cases where a dismissal is unfair by virtue of health and safety, employee representative, trade union, or occupational pension trustee reasons will increase from £5,970 to £6,203.

The new rates take effect where the ‘appropriate date’ for the cause of action (such as the date of termination in an unfair dismissal claim) falls on or after 6 April 2018. Where the appropriate date falls before 6 April, the old limits will still apply, irrespective of the date on which compensation is awarded.