UK Employment Rate and Compensation Increases Now in Effect

The following changes came into effect on 6 April 2020.

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.

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):