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From 6 April 2024, new increased compensation limits for employment tribunal claims and other amounts payable under employment legislation will come into force. What are the key increases that you need to be aware of?

The Employment Rights (Increase of Limits) Order 2024 will increase the maximum amount of a “week’s pay” from £643 to £700 from 6 April 2024. A week’s pay is used to calculate statutory redundancy pay, as well as payments to employees in the event of insolvency and various tribunal awards, including the unfair dismissal basic and additional awards.

  • the NLW rate will rise by 9.8% from £10.42 to £11.44 per hour – this rate currently applies to workers aged 23 and over but it will be extended to also apply to 21 and 22 year olds from 1 April 2024
  • the NMW rate for workers aged 18 to 20 will rise by 14.8% from £7.49 to £8.60 per hour
  • the NMW rate for workers aged 16 and 17 will rise by 21.2% from £5.28 to £6.40 per hour
  • the NMW rate for apprentices aged under 19, or those aged 19 and over but in the first year of their apprenticeship, will rise by 21.2% from £5.28 to £6.40 per hour
  • the daily offset for the provision of living accommodation to a worker will rise by 9.8% from £9.10 to £9.99 per day.

The other key increases are:

  • the limit on the daily amount of statutory guarantee pay will increase from £35 to £38
  • the limit on the amount of the unfair dismissal compensatory award will rise from £105,707 to £115,115 (there is an additional cap of one year’s gross salary on the compensatory award)
  • the minimum basic award for certain unfair dismissals, such as dismissals due to trade union membership or activities, for carrying out activities as health and safety or employee representative or for carrying out duties as an occupational pension scheme trustee, will go up from £7,836 to £8,533.

The increases apply where the event giving rise to the entitlement to compensation or other payment occurs on or after 6 April 2024. The sums previously in force under the 2023 Order will continue to apply where the relevant event is before 6 April 2024.

The increases made by the Order reflect the increase in the retail prices index (RPI) of 8.9% from September 2022 to September 2023.