Are you wondering how the 1 February change in award limits and amounts payable under employment law may affect your business? Personnel Today sets out five things that employers need to know about the new award limits coming into force. The new limits are applicable where the event that gives rise to the award or payment occurs on or after 1 February 2012.
1. Statutory redundancy payment increases
The cap on a week’s pay for calculating statutory redundancy increases from £400 to £430 on 1 February. The new maximum statutory redundancy pay is £12,900.
- Award limits and amounts payable under employment legislation from 1 February 2012.
- Calculators on XpertHR – including a statutory and enhanced redundancy pay calculator.
- Statutory redundancy payments ready reckoner.
- How is redundancy pay calculated under the Employment Rights Act 1996?
- Should regular overtime be taken into account when calculating weekly earnings for redundancy pay purposes?
- Where an employee has recently changed from full-time to part-time hours how should their redundancy payment be calculated?
- Redundancy workflow – guides employers through the redundancy process.
2. Unfair dismissal basic award increases
An award of compensation for unfair dismissal is made up of a basic award as well as a compensatory award. The limit on a week’s pay for calculating the basic award for unfair dismissal increases from £400 to £430 on 1 February. The basic award is calculated in the same way as statutory redundancy pay, so it is based on the employee’s age, length of service and earnings.
- Award limits and amounts payable under employment legislation from 1 February 2012.
- What is the unfair dismissal basic award?
- Unfair dismissal basic award.
3. Unfair dismissal compensatory award increases
The maximum compensatory award for unfair dismissal increases from £68,400 to £72,300 on 1 February. However, no maximum applies in certain circumstances, for example where the dismissal is for making a protected disclosure.
- Award limits and amounts payable under employment legislation from 1 February 2012.
- What is the unfair dismissal compensatory award?
- Unfair dismissal compensatory award.
- Unfair dismissal awards 2010/11 – the number of awards in each band, the highest and the average payments.
4. A “week’s pay” increases for other compensation
The increase to the statutory cap on a week’s pay from £400 to £430 on 1 February will raise the limit on certain other awards a tribunal can make. These include the award for refusing to allow an employee to be accompanied at a disciplinary or grievance hearing, and for failure to follow the statutory procedure in relation to a request for flexible working.
- Calculation of a week’s pay.
- Compensation for failure to comply with the right to be accompanied in disciplinary and grievance hearings.
- Compensation for breaches to the right to request flexible working.
- Compensation for breaches of rights in relation to pay and statutory payments.
5. Guarantee payment increases
The limit on the guarantee payment for a “workless day” rises from £22.20 to £23.50 on 1 February. A workless day is one where the employee is not provided with work throughout a day or shift on which they are normally required to work.
- Award limits and amounts payable under employment legislation from 1 February 2012.
- When is an employee entitled to a guarantee payment?
- Are there any qualifying conditions of guarantee payments?
- Quick reference guide to guarantee payments.
Coming soon
More key employment law developments are coming into force in 2012, including an increase in the qualifying period for unfair dismissal claims. Keep up to date with all the forthcoming changes using the XpertHR legal timetable and HR calendar.
- Agenda 2012: Employment law key dates.
- Qualifying period for unfair dismissal to be increased.
- Podcast: “Radical” employment law reform; and employee engagement.
Full details of the 1 February changes are available in the XpertHR quick reference guide.
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