The annual increases in maximum limits of compensation awardable by employment tribunals have been announced by the DTI.
These will take effect from 1 February 2005 under the Employment Rights (Increase of Limits) Order 2003.
The headline increases are:
- The maximum compensation for unfair dismissal is to be increased from £55,000 to £56,800;
- The maximum amount of "a week's pay" (for calculating statutory redundancy pay or the basic award for unfair dismissal) is to be increased from £270 to £280.
- The minimum basic award a tribunal can make for certain defined dismissals (relating to certain employee representative, health and safety and working time cases) will rise from £3,600 to £3,800.
The increased compensation rates will apply to dismissals taking place on or after 1 February 2005. This means that if an employee is dismissed before 1 February then the old rates will apply, even if the tribunal hearing takes place after that date.
However, if notice is given before 1 February but the notice period will expire on or after that date, the new limits will apply.