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New Employment Compensation Limits from April 2016

The limit applying to certain employment tribunal awards and other amounts payable under employment legislation (such as redundancy payments) will increase from April 2016. Amongst other things, the Employment Rights (Increase of Limits) Order 2016 raises the limit for unfair dismissal compensation from £78,335 to £78,962. The Order also increases the maximum week’s pay which can be taken into account when calculating amounts payable under employment legislation from £475 to £479.

In cases involving dismissal, the new figures will apply where the effective date of termination falls on or after 6 April 2016. Where termination occurred/occurs before 6 April 2016, the current rates will apply.

The table below shows the increases to the relevant awards and compensation.

Compensation limit

Current figure

From 6 April 2016

Maximum compensatory award for unfair dismissal

£78,335

£78,962

Maximum limit on a week's pay

£475

£479

Minimum basic award for certain unfair dismissals (dismissals for reasons of trade union membership or activities, health and safety duties, pension scheme trustee duties or acting as an employee representative or workforce representative)

£5,807

£5,853




This bulletin is for general guidance purposes only and should not be used for any other purpose.

Brabners is a Limited Liability Partnership