Changes to statutory redundancy pay and others from 6 April 2015

From 6 April 2015, the annual increase in compensation limits will apply.

Compensatory award at tribunal

An employee who successfully demonstrates that he or she has been unfairly dismissed is entitled to claim a compensatory award.  From 6 April 2015, the maximum compensatory award at tribunal will increase to 52 weeks’ pay or £78,335 (previously £76,574), whichever is lower.

A week’s pay

The maximum for a week’s pay will increase to £475 (previously £464) from 6 April 2015.

Why does it matter to employers?

Whilst I would hope that, even if you are faced with a tribunal, any potential award would be substantially lower than the statutory cap, it is important to note the increase in a week’s pay for redundancy payment calculations.  Redundancy pay is based on age, length of service and weekly pay, capped at the appropriate rate.

The Government has a helpful online calculator which can also be used, where appropriate.

You should be taking steps now to ensure that the appropriate person is aware of the proposed changes to these statutory caps.

Andrew Wallace
Trainee Solicitor – Employment Law

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