The move follows the annual review of the maximum compensation rate
The new maximum for a ‘week’s pay’ (used to calculate the basic award in unfair dismissal cases, statutory redundancy pay and a number of other awards) increases from £544 to £571.
This means the maximum basic award for unfair dismissal and the maximum amount of statutory redundancy pay (which is worked out taking into account an employee’s age, years of service and weekly pay) increases from £16,320 to £17,130.
The maximum compensatory award also increases, from £89,493 to £93,878 (although this award is also subject to an alternative limit of one year’s gross pay if that is lower).
The minimum basic award for automatic unfair dismissal – for example, on grounds of health and safety or trade union involvement – increases from £6,634 to £6,959.
The new limits apply to dismissals (and other relevant events) occurring on or after 6th April 2022.
Employers should budget for the new increases when considering whether to dismiss an employee.
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