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Limits on tribunal awards

5 March 2021

The Employment Rights (Increase of Limits) Order 2021 will come into force on 6 April 2021. This Order increases the level of a number of compensation caps for tribunal awards and statutory payments. Where the case involves dismissal, these figures will only apply where the dismissal takes place on or after 6 April 2021.

The increases include:

  • The limit on a week’s pay (used in both the calculations for an unfair dismissal basic award and for statutory redundancy pay) increasing from £538 to £544.
  • The compensatory award cap which applies in ordinary unfair dismissal cases increasing from £88,519 to £89,493.
  • The minimum basic award for certain unfair dismissals – such as some health and safety dismissals – will increase from £6,562 to £6,634.

Employers will need to be mindful of the changes, particular in the current climate where redundancies may be taking effect on or after 6 April, to ensure the correct rates are applied.

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