UK Employment Rate and Compensation Increases Now in Effect - McDermott Will & Emery

UK Employment Rate and Compensation Increases Now in Effect


In case you have been distracted by other recent events in the UK, here is a reminder that the compensation limits on Employment Tribunal awards and certain other amounts payable under UK employment legislation increased as of the first week of April 2019.

This alert sets out the changes in full and highlights important consequences for employers.

In Depth

Key Points for Employers

The changes relating to redundancy and unfair dismissal payments, as set out in the table below, took effect on 6 April 2019, and will apply to dismissals occurring on or after that date.

It is important for employers to note:

  • If an employee was given notice prior to 6 April 2019, but the notice period expires on or after 6 April, the new limits will apply.
  • If an employee’s employment is terminated by means of a payment in lieu of notice, the effective date of termination (EDT) is the actual date the dismissal takes effect, plus the amount of statutory notice applicable to the employee, 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 2019, the new limits will apply.

Itemised Payslips

Employers should also be aware that, with effect from 6 April 2019, the right to receive a written, itemised pay statement extended to include ‘workers’ as well as ‘employees’. ‘Workers’ includes agency workers and zero hours workers.