Details of the annual increase in the limits on certain employment tribunal awards and other amounts payable under employment legislation have been announced. The increased amounts will apply where the event that gives rise to the entitlement to compensation or other payment (for example the effective date of dismissal or redundancy) occurs on or after 1 February 2013.

The limit on a "week's pay", which amongst other things is used to calculate statutory redundancy payments, will increase from £430 to £450.

The maximum compensatory award for unfair dismissal will increase from £72,300 to £74,200.

Employers considering redundancies in the near future where the termination date will be 1 February 2013 or later should take account of the increased amounts in their cost projections.

In September, the Government consulted, among other things, on changing how the cap on the compensatory award is calculated - for more details, please refer to our earlier update here.  The consultation is now closed and we await the Government's response.  We will keep you updated on relevant developments.