The Employment Rights (Increase of Limits) Order 2011 has been published and will come into force 1st February 2012. The Order increases the limits applyed to certain employment tribunal awards and to other amounts payable under employment legislation.

The main changes are:

• Maximum amount of a ‘week’s pay’ for the purpose of calculating a redundancy payment or the basic or additional award of compensation. This is for unfair dismissal or payments to employees in the event of insolvency. It will increase from £400 to £430.
• Limit on the amount of compensatory award for unfair dismissal. Increased from £68,400 to £72,300.
• Limit on the daily amount of statutory guarantee payment. Incraesed from £22.20 to £23.50.

The increases apply where the event resulting in compensation or other payment occurs on or after 1 February 2012. The date is determined differently depending on the type of claim brought. In unfair dismissal claims, this date is the effective date of termination of employment. In guarantee payment claims, it is the day (1st Feb 2012) which the payment is due. 

The increases reflect an increase of 5.6% in the retail prices index from September 2010 to September 2011.

Word by CybHR Legal Team