Employment compensation limits increased from 6 April 2019. These figures are important for calculating statutory redundancy pay, and template redundancy documentation may need to be updated. The figures also help employers in assessing potential awards if claims are brought, and in gauging how to approach settlement discussions.
The limits for the most common awards are now:
maximum compensatory award for unfair dismissal - £86,444 (or a year’s gross pay, if lower)
maximum statutory redundancy payment (and basic award for unfair dismissal) - £15,750
maximum 'week’s pay’ (for calculating awards including redundancy) - £525
Compensation for unfair dismissal is based on actual and prospective loss, and other factors are taken into account, such as an employee’s contribution to their dismissal, and whether a dismissal would have been likely to happen irrespective of any procedural breaches: the median award for 2017/18 was £8,015, far less than the maximum. However there is, of course, no maximum limit for discrimination or whistleblowing claims which in theory can attract much higher levels of compensation.
The bands used for calculating awards for injury to feelings in discrimination cases (known as the Vento bands) have also been increased.
For claims issued on or after 6 April 2019, the bands will be:
lower band (appropriate for less serious cases, such as where the act of discrimination is an isolated or one-off occurrence) - £900 to £8,800
middle band (for cases that do not merit an award in the upper band) - £8,800 to £26,300
upper band (for the most serious cases, such as where there has been a lengthy campaign of discriminatory harassment on the ground of sex or race) - £26,300 to £44,000: in the 'most exceptional cases' only awards for injury to feelings may exceed £44,000.