Annual increases to statutory compensation limits
THE EMPLOYMENT RIGHTS (INCREASE OF LIMITS) ORDER 2022 HAS BEEN LAID BEFORE PARLIAMENT
The Employment Rights (Increase of Limits) Order 2022 has been laid before Parliament and will revise the compensation limits for certain tribunal awards and other statutory payments from 6 April 2022.
What are the relevant statutory compensation limits increases?
The Employment Rights (Increase of Limits) Order 2022 will increase the maximum amount of a “week’s pay” from £544 to £571 from 6 April 2022.
A “week’s pay” is used to calculate statutory redundancy payments, payments to employees in the event of insolvency and various awards including the unfair dismissal basic and additional awards.
Other key increases are:
- the maximum compensatory award for unfair dismissal will rise from £89,493 to £93,878 (there is an additional cap of one year’s salary on the unfair dismissal compensatory award)
- the limit on the daily amount of statutory guarantee pay will rise from £30 to £31
- the minimum basic award for certain unfair dismissals, such as dismissals for reasons of trade union membership or activities, health and safety duties or acting as an employee representative or workforce representative, will rise from £6,634 to £6,959.
The increases apply where the event giving rise to the entitlement to compensation or other payment occurs on or after 6 April 2022. In unfair dismissal claims, that date is the effective date of termination of employment.
The limits previously in force will still apply where the effective date of termination falls before 6 April 2022.