The compensation limits on Employment Tribunal awards and certain other amounts payable under UK employment legislation increased as of 6 April 2015. The key changes are set out below.

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What Does This Mean for Employers?

The changes took effect on 6 April 2015 and apply to dismissals that occurred on, or will occur after, that date.

It is important for employers to note that

  • If an employee was given notice prior to 6 April 2015, but the notice period expired on 6 April or will expire on a future date, the new limits above will apply to that dismissal.
  • If an employee's employment is terminated by means of a payment in lieu of notice, the effective date of termination (EDT) is the actual date the dismissal takes effect, plus the amount of statutory notice applicable to the employee, i.e., one week per year of employment, up to a maximum of 12 weeks. If the statutory notice would take the EDT to or beyond 6 April 2015, the new limits will apply.

An employer’s exposure in the event of an unfair dismissal claim will also rise and should therefore be factored into decision-making regarding litigation or settlement strategies.