Fact Service January 2011

Issue 4

Tribunal award limits rise next month

New limits to the amount of compensation that an employment tribunal can award come into force on 1 February 2011.

Compensation for being unfairly dismissed is comprised of two main elements: basic award and compensatory award. The basic award depends on length of employment and age prior to dismissal. From 1 February, the maximum amount of “a week’s pay” rises to £400 from £380. The maximum award, depending on age and service, is now £12,000.

The compensatory award element of unfair dismissal compensation essentially covers the individual’s loss of earnings, for example, the amount of salary lost before they secure another job. The cap on this part of a claimant’s award has risen to £68,400. This means that the maximum total that an individual can receive is £80,400.

Other increases to the compensation limits brought in by the Employment Rights (Increase of Limits) Order 2010 are that the amount of the award for unlawful inducement relating to trade union membership or activities, or for unlawful inducement relating to collective bargaining goes up from £3,100 to £3,300.

The entitlement to guarantee payment, the amount payable to an employee in respect of any day where the employer provides no work, goes up from £21.20 to £22.20 a day. The maximum level of guarantee payment rises to £111 from £106 in any three-month period as it is restricted to pay for five days in any three months.

www.legislation.gov.uk/uksi/2010/2926/made