The compensation limits on Employment Tribunal awards and certain other amounts payable under UK employment legislation have increased with effect from 6 April 2020.
This Alert sets out the latest changes in full and highlights important consequences for employers.
The following changes came into effect on 6 April 2020.
Employment Tribunal Award / Statutory Rate
One week’s pay for calculating redundancy and the unfair dismissal basic award
Maximum basic award for unfair dismissal and maximum statutory redundancy pay
Maximum compensatory award for unfair dismissal
Maximum total award for unfair dismissal, i.e., maximum unfair dismissal compensatory award plus maximum basic award
Minimum basic award for certain unfair dismissals, including dismissals relating to health and safety and pension scheme trustee duties
Statutory sick pay per week
Family-friendly statutory pay (adoption, maternity, paternity and shared parental pay) per week
The changes relating to redundancy and unfair dismissal payments, as set out in the table above, will apply to dismissals where the effective date of termination (EDT) falls on or after 6 April 2020.
It is important for employers to note:
If an employee was given notice prior to 6 April 2020, but the notice period expires on or after 6 April 2020, the new limits will apply.
If an employee’s employment is terminated by means of a payment in lieu of notice, the EDT is the actual date the dismissal takes effect, plus the amount of statutory notice applicable to the employee, i.e., one week per year of employment, up to a maximum of 12 weeks. If the statutory notice would take the EDT to or beyond 6 April 2020, the new limits will apply.
Note that for other employment claims, such as discrimination and whistleblowing, an employer’s potential liability remains uncapped.
For completeness, note that the following changes to national minimum wage levels came into effect on 1 April 2020.
National Minimum Wage / National Living Wage
25 and over
21 to 24
18 to 20
Injury to Feelings Awards
Unlike in unfair dismissal cases, where only economic loss is recoverable, successful claimants in discrimination and whistleblowing cases can recover compensation in the employment tribunal for non-economic loss, otherwise known as “injury to feelings awards.”
Although there is theoretically no limit on the compensation that may be awarded in discrimination and harassment cases, employment tribunals must follow official guidelines when making awards for injury to feelings. These guidelines set out three bands of compensation, depending on the seriousness of the discrimination and its effect on the victim.
For claims submitted on or after 6 April 2020, the amount that might be awarded for injury to feelings has been increased as follows (the previous maximum amount is shown in square brackets):
Lower band (less serious cases)
Between £900 and £8,800
Between £900 and £9,000
Middle band (cases that do not merit an award in the upper band)