Employment Alert No. 113: Increase in Employment Protection Awards
December 15, 2005
| Statutory redundancy pay |
The current maximum amount permitted for calculation of a week's pay will rise from £280 to £290.
| Basic award or additional award of compensation for unfair dismissal (in cases of failure to comply with an Order for reinstatement) |
The current maximum amount for a week's pay will rise from £280 to £290.
| Maximum Compensatory Award |
The maximum Compensatory Award a Tribunal can award for unfair dismissal will rise from £56,800 to £58,400.
| Minimum Basic Award for defined dismissals |
The minimum Basic Award a Tribunal can award for certain defined dismissals (relating to certain employee representative, health and safety and working time cases) will rise from £3,800 to £4,000.
| What does this mean for employers? |
The changes will take effect on 1 February 2006 and will be applicable to redundancies and dismissals on or after this date.
It is important for employers to note that if an employee:
- is given notice prior to 1 February 2006 but his/her notice period will expire on or after 1 February 2006 then the new limits set out above will apply to that dismissal;
- is paid in lieu of notice, in most cases the effective date of termination will be the actual date of termination plus the amount of statutory notice applicable to the employee (ie 1 week per year of employment up to a maximum of 12 weeks). If the statutory notice would take the effective date of dismissal to or beyond 1 February 2006, then the new limits will apply.
