Unfair dismissal payout limit to increase in 2012

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Details have been published of planned changes to the limits and amounts payable under employment legislation.

The changes, due to take effect from 1 February 2012, include an increase in the maximum award for unfair dismissal, from £68,400 to £72,300.

Under s.34 of the Employment Relations Act 1999, if retail prices index (RPI) inflation for September is higher or lower than the RPI for the previous September, changes must be made to the limits that apply to certain employment tribunal awards and other amounts payable under employment legislation by the same percentage as the change in RPI.

In this case, the changes reflect a 5.6% increase in RPI from September 2010 to September 2011.

The new limits apply where the event that gives rise to the award or payment occurs on or after 1 February 2012.

The changes also include the following increases:

  • the maximum amount of a week’s pay used to calculate a statutory redundancy payment and the basic and additional awards for unfair dismissal, from £400 to £430;
  • the minimum compensation where an individual is excluded or expelled from a union in contravention of s.174 of the Trade Union and Labour Relations (Consolidation) Act 1992, and not admitted or readmitted by the date of the tribunal application, from £7,600 to £8,100; and
  • the limit on the amount of a guarantee payment payable to an employee in respect of any day, from £22.20 to £23.50.


Full details of the changes are available in a quick reference guide on XpertHR.