You may remember that the date for the annual index-linked change to the maximum compensatory award limit for Employment Tribunal claims has moved from 1 February to 6 April. When I published my previous blog BIS had confirmed that there would be an increase in the maximum compensatory award in April 2014 but the new limits had not been published.
These new limits have now been released and I thought it would be useful to summarise them. From 6 April:-
- The maximum compensatory award that a Tribunal can make will increase from £74,200 to £76,574.
- A weeks pay (which is used for calculating statutory redundancy payments and basic awards) will increase from £450 to £464.
These changes apply to claimants whose effective date of termination falls on or after 6 April 2014.
You should remember though that the compensatory award is also subject to a further cap of 12 months' pay. So, as of 6 April, the maximum compensatory award will be the lower of £76,574 or 12 months' pay. These caps do not apply where the dismissal is for discriminatory reasons or where the dismissal was due to whistleblowing or for raising certain health and safety issues.
It is worth noting that the statutory cap has been challenged by way of a judicial review. My view though is that this challenge in unlikely to be successful.