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Annual compensation limit increase

Posted

The annual change to the compensation limits is shortly to come into effect. For dismissals that take place on or after 6th April 2015, the new limits will be as follows

Maximum for a week’s pay – £475 (currently £464)
Maximum compensatory award – £78,335 (currently £76,574)

Comment

Paul Burton, Employment Associate says, “These limits are mainly used in two circumstances. Firstly, the week’s pay limit is used when calculating an employee’s redundancy pay.” If they earn more than the limit then each week of redundancy pay will be capped at this limit, unless the employer has an enhanced redundancy scheme. Secondly, both limits are used when a claim for unfair dismissal is successful in the employment tribunal. The week’s pay limit is used for the Basic Award (since this is calculated the same way as redundancy pay) and the compensatory award limit is used if a dismissed employee’s annual salary is higher (if it is lower the annual salary is itself the limit since 2013).

At Frettens, all of our solicitors offer a free initial meeting or chat on the phone to answer your questions. If this article raises issues for you or your business, please call us on 01202 499255 and Kate or Paul will be happy to discuss it with you.

The content of this article, blog or video is not intended as specific legal advice. For tailored assistance, please contact a member of our team.

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