The new compensation limits for 2008 have been announced and will apply to all claims where the appropriate date is on or after 1 February 2008. This includes increases to the following limits:
- a week's pay to £330; and
- maximum compensatory award for unfair dismissal to £63,000.
For claims where the appropriate date is on or after 1 February 2008 you will need to calculate compensation (such as statutory redundancy payments) according to the new limits.
The Employment Rights (Increase of Limits) Order 2007 contains the increase in limits to tribunal awards.
The key increases are:
- a week's pay for the calculation of the basic award in unfair dismissal cases and the statutory redundancy payment increases to £330 (currently £310), giving a maximum award of £9,900;
- the compensatory award for unfair dismissal increases to £63,000 (currently £60,600); and
- the minimum basic award for defined dismissals (for trade union, health and safety reasons etc) increases to £4,400 (currently £4,200).
The new limits will apply where the "appropriate date" falls on or after 1 February 2008. The "appropriate date" will depend upon the type of claim brought, but in most cases, (i.e. unfair dismissal and redundancy pay claims), the appropriate date is an employee's effective date of termination. Where the appropriate date falls before 1 February 2008, the limits currently in force will continue to apply.