The Employment Rights (Increase of Limits) Order 2018 will come into force on 6 April 2018. It provides that certain compensation limits will be increased from this date.

The changes are as follows:

  1. The limit on the compensatory award for unfair dismissal will rise from £80,541 to £83,682, which means that the maximum amount that an Employment Tribunal can award for an unfair dismissal claim is £83,682 or one year’s gross pay whichever is lower.
  2. The limit on the maximum week’s pay for the purposes of calculating statutory redundancy payment and unfair dismissal basic award will increase from £489 to £508.

The new rates take effect where the ‘appropriate date’ for the course of action, such as the date of termination in an unfair dismissal claim, falls on or after 6 April 2018. In cases where the date of termination falls before 6 April 2018, the old limits will continue to apply.