The annual increase to the Employment Tribunal award limits has just been announced although it is a little unclear how this fits in with the Government's plans to limit the cap (see further details below).

As of 1st February 2013 the position will be as follows:-

  • maximum unfair dismissal compensatory award £74,200 (increased from £72,300)
  • maximum week's pay £450 (increased from £430 - this figure is used for calculating statutory redundancy payments and the basic award in an employment tribunal)

This now means that the maximum unfair dismissal award can be £87,700 (maximum basic award plus maximum compensatory award).

Bear in mind that there is still no limit to the amount that can be awarded for unfair dismissal for certain health and safety and whistleblowing reasons. In addition, there is no limit to the amount that can be awarded for discrimination claims.

What it unclear is where this leaves us in respect of the Government's plans, in terms of the Enterprise and Regulatory Reform Bill to give the Secretary of State the power to limit the cap on unfair dismissal claims to:-

  • a lower figure between the full-time annual median earnings (£26,000) and three times full-time annual median earnings (£78,000); or
  • 12 months' salary; or
  • a combination of the two, whichever is the lower.

My understanding is that this is still in the pipeline so it may yet be possible that the new cap of £74,200 referred to above will be varied at some point in 2013.