Employment tribunal compensation increases announced

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.

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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.